Silver and Gold Prices Plunge Amid Geopolitical Tensions and Stronger US Dollar

Silver prices in the national capital fell by Rs 9,000 to Rs 2.56 lakh per kg, while gold dropped by Rs 2,950 to Rs 1.60 lakh per 10 grams. Analysts cite weak global trends and a stronger US dollar. Traders attribute declines to profit-booking and shifting safe-haven demand toward the dollar and bonds.

In a significant market shift, silver prices in the national capital crashed by Rs 9,000, reaching Rs 2.56 lakh per kg, while gold saw a decline of Rs 2,950, settling at Rs 1.60 lakh per 10 grams, according to the All India Sarafa Association. Analysts attributed these drops to prevailing weak global trends and the strength of the US dollar.

Traders noted a marked shift in safe-haven demand, moving from precious metals to the US dollar and bonds, particularly as crude oil prices rise amid escalating geopolitical tensions. Dilip Parmar, a Senior Research Analyst at HDFC Securities, highlighted that the unwinding of positions was triggered by soaring crude oil prices, pushing investors to realign their strategies.

Expectations of a pause on interest rate adjustments by global central banks, stemming from inflationary pressures linked to energy supply disruptions, further fueled the bearish outlook on gold and silver. In international markets, bullion experienced a similar downturn, with gold slipping below USD 5,000 per ounce and silver falling under USD 80 per ounce. Market focus now shifts to the upcoming Federal Open Market Committee meeting for future policy cues.

(With inputs from agencies.)