‘The best time was 20 years ago, the second best time is today…’ A Chinese proverb seems to be proving true at this time. It is worth noting that a major decline in silver prices was seen in the 1980s, and now, gold and silver prices are continuously falling in the commodity market. After the turmoil on Sunday on the budget announcement day, gold and silver prices continued to fall on MCX on Monday. Investors who were excited by the rise in silver prices above ₹4 lakh and were looking to make profits from it, have lost almost half their money in just four days. On the other hand, gold prices are also continuously falling.
Silver wreaked havoc
The fall in silver prices is increasing with each passing day. If we look at the price of silver on Multi Commodity Exchange, the price of silver with expiry of March 5 fell by more than 12%. Compared to the Budget day, after a sharp fall on Sunday, the price of 1 kg silver closed at ₹2,65,652, and it touched 15% lower circuit on Monday. After this, the price of silver fell to ₹2,25,805 per kg. This means it became cheaper by ₹39,847 per kg in a single day.
Silver becomes cheaper by almost ₹ 2 lakh in 4 days
Ahead of the Budget, silver prices had surged on Thursday, with the futures price of 1 kg of silver on MCX crossing ₹4 lakh for the first time. By the end of commodity trading, it had touched its all-time high of ₹4,20,048 per kg. If we calculate the fall from this high, silver has become cheaper by ₹1,94,243 in just four days. Based on this, investors’ money has almost halved. Gold is also struggling to maintain its hold.
Amidst the ongoing fall in silver prices, gold is also not able to stabilize and has fallen significantly from its high levels. After a sharp fall on the Budget day, when commodity markets resumed trading on Monday, they again looked in disarray. If we look at the MCX gold rate on the last trading day, Sunday, the price of 24-carat gold with expiry of April 2 closed at ₹ 1,47,753 per 10 grams, but then fell to ₹ 1,38,888, i.e. it became cheaper by ₹ 8,865 in a single day. If we calculate the recent fall from its highs, both gold and silver prices had hit a new high last Thursday, with gold reaching ₹1,93,096 per 10 grams. From this high level, gold price has now fallen by ₹54,208.
Why are gold and silver prices falling?
Talking about the reasons behind the fall in gold and silver prices, after reaching high prices, investors booked huge profits, and this selling had a direct impact on the prices of these precious metals, due to which they came down from their all-time high levels, and the fall is not stopping.
Other reasons include a decline in industrial demand for silver, particularly in China and Europe. Another big reason is the strengthening of the US dollar. Donald Trump’s statement that Kevin Worsh will replace Jerome Powell as the next US Federal Reserve Chairman has increased the value of the dollar, putting pressure on gold and silver as investors started selling them.
