The biggest ever decline in gold and silver prices (Gold-Silver Price Crash) has been seen. The price of silver has fallen by more than Rs 1 lakh in a single day, while gold has also become cheaper by more than Rs 33,000 per 10 grams in one go. This sudden and sharp fall in the prices of these precious metals has been seen not only in futures trading but also in the domestic market. Experts were already predicting a major decline in precious metals prices, which had reached historic lows, and that is exactly what happened. Let us know the main reasons behind the fall in gold and silver prices…
The silver bubble burst in the blink of an eye
The experts’ predictions have come true, and the silver bubble has finally burst (Silver Bubble Burst). Yes, the price of 1 kg silver has fallen by more than Rs 1 lakh in just one day. On the Multi Commodity Exchange, after rising sharply to a new high last Thursday, it finally closed at Rs 3,99,893 per kg. However, on Friday, when futures trading closed, the price of silver with March 5 expiry fell sharply (silver price crash), falling sharply to Rs 2,91,922. This means it became cheaper by Rs 1,07,971 per kg in one go.
How much did the price of silver fall from its highest level?
Just a day earlier, on Thursday, silver prices had risen at a rocket pace, hitting a high of Rs 4,20,048 per kg, crossing the historic high of Rs 4 lakh per kg for the first time in history. But silver, which reached such a high level, suddenly gave a big blow to the investors, and in just one day it became cheaper by Rs 1,28,126 from that high level.
Not only silver, gold also fell
Not only silver, but also the gold bubble has burst. The price of 10 grams of 24 carat gold saw a huge fall of ₹33,113 in just one trading day. Gold prices also fell along with a sharp fall in silver prices. On MCX, gold futures contracts expiring on April 2 closed at ₹183,962 per 10 grams on Thursday, and fell to ₹150,849 per 10 grams by market close on Friday. Looking at the fall from its peak, gold prices, like silver, had risen dramatically on Thursday, hitting a lifetime high of ₹193,096, before suddenly crashing, making gold ₹42,247 per 10 grams cheaper than its peak.
Why did this sudden and huge decline occur?
Amid the sharp rise in gold and silver prices, experts had already predicted that the prices may fall sharply after reaching such highs, and on Friday their predictions came true. Several factors contributed to this decline in the prices of these precious metals.
A major reason for the fall in gold and silver was profit-booking. After reaching historic levels, investors started booking profits in gold and silver, and the prices of both fell due to selling pressure. Not only gold and silver, but also their ETFs (gold-silver ETF crash) saw a sharp fall. The strengthening of the US dollar also played an important role in this. Generally, when the US dollar strengthens, it becomes more expensive for investors in other countries to buy gold and silver, which reduces demand and results in lower prices.
Along with the dollar, US Treasury yields also rose, making safe-haven bonds more attractive to investors, which contributed to the selling pressure. Apart from this, news related to Donald Trump’s statements on reducing global tensions and the possibility of replacing Jerome Powell in the US Federal Reserve with his favorite candidate Kevin Worsh also put pressure on gold and silver prices.