Mumbai, January 31 (IANS). This week there was a sharp fall in the prices of gold and silver. The prices of precious metals suddenly fell due to the strengthening of the dollar and heavy profit booking by investors.
On Friday, on MCX (Multi Commodity Exchange), gold for February delivery fell by about 9 percent, while silver for March delivery registered a huge fall of up to 25 percent. At present, the price of gold was recorded at Rs 1,49,075 per 10 grams and the price of silver was recorded at Rs 2,91,922 per kg.
According to the data of India Bullion and Jewelers Association (IBJA), the price of 24 carat gold fell to Rs 1,65,795 per 10 grams. Earlier it had closed at Rs 1,75,340.
A major reason for the fall in precious metals is the strengthening of the US dollar. This happened when US President Donald Trump put forward the name of Kevin Wersh to be the next Federal Reserve Chairman.
Experts say that Kevin Varsh takes a strict stance on keeping inflation under control and is not considered to be in favor of low interest rates. For this reason, investors of gold and silver started selling rapidly.
Analysts said the US dollar strengthened, real bond yields rose and leveraged positions in gold and silver, which were taken as a hedge against currency value declines, were quickly liquidated. Due to this, there was sharp selling in the market, due to which billions of dollars of market value was wiped out and weak investors were driven out. According to analysts, this situation is a sign of rapid progress towards exhaustion, and not the beginning of a long-term recession (bear market).
However, experts believe that long-term fundamentals still remain strong. Silver supply remains structurally short due to continued gold purchases by central banks, as well as growing industrial demand from green energy, electric vehicles (EV), artificial intelligence (AI), and electronics. This is the reason why the bullish outlook for gold and silver remains intact in the long term.
According to market experts, this decline is a kind of necessary reform process. This has eliminated excessive speculation and risky investments, allowing the market to move up in a more stable manner in the future.
According to experts, if the price of silver falls to the level of Rs 3 lakh to Rs 3.10 lakh, then buying can start again from there, due to which silver can potentially go up to the level of Rs 3.40 lakh to Rs 3.50 lakh per kg.
–IANS
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