Silver meltdown deepens; tumbles Rs 26,273 to hit lower circuit at Rs 2.65 lakh per kg in futures trade

Gold futures also witnessed high volatility on Sunday, with April contract plunging by 9 per cent to Rs 1,38,634 per 10 grams in early trade, hitting the lower circuit level on the MCX.

Falling for the second consecutive day, silver slumped by Rs 26,273 per kg or 9 per cent to Rs 2.65 lakh per kg in futures trade on Sunday, while gold fell 3 per cent to Rs 1.47 lakh per 10 grams as investors keep booking profits at elevated levels. On the Multi Commodity Exchange (MCX), silver for March delivery tanked Rs 26,273, or 9 per cent, to close at its lower circuit limit of Rs 2,65,652 per kg. In the previous session, the white metal had slumped Rs 1,07,968, or 27 per cent, to close at Rs 2,91,925 per kg, also touching its lower circuit level. In two trading sessions, silver has plummeted by Rs 1,34,241, or 33.6 per cent, while on a weekly basis, the metal cracked Rs 69,047, or nearly 21 per cent, from Rs 3,34,699 per kg recorded on January 23. Gold futures also witnessed high volatility on Sunday, with April contract plunging by 9 per cent to Rs 1,38,634 per 10 grams in early trade, hitting the lower circuit level on the MCX. Later, it recovered some of its losses to close at Rs 1,48,104 per 10 grams, down by 3 per cent or Rs 4,241. On Friday, gold plunged Rs 31,617, or 17.2 per cent, to Rs 1,52,345 per 10 grams, after hitting a record of Rs 1,93,096 per 10 grams on Thursday. ''Overspeeding leads to a crash and that's what we saw in Bullion prices,'' Pranav Mer, Vice President, EBG - Commodity & Currency Research, JM Financial Services Ltd, said. ''Gold is down 20 per cent and silver down nearly 37 per cent from all-time high. In the domestic market, amid follow-up selling on Sunday,'' he added. Global futures markets remained closed on Sunday for a holiday. On Friday, however, the carnage in gold and silver futures in the international markets was more severe than in the domestic ones. Comex gold futures for April delivery depreciated USD 612, or 11.39 per cent, to settle at USD 4,763.10 per ounce, after hitting a fresh peak of USD 5,626.8 per ounce on Thursday. Silver futures on the Comex for March delivery slumped USD 35.89, or 31.37 per cent, to close at USD 78.53 per ounce on Friday, after scaling a lifetime high of USD 121.78 per ounce on Thursday. Analysts said a strong US dollar, following Federal Reserve Chair Jerome Powell's indication that rate cuts were unlikely soon, weighed on the bullion prices. Meanwhile, US President Donald Trump nominated former Federal Governor Kevin Warsh as his pick for the next Fed Chair. Warsh, historically a hawk and a follower of disciplined monetary policy characterised by higher real rates and a limited balance sheet. But he has recently tilted towards Trump's preference for lower borrowing costs, and that may well have secured his selection, they added. ''Profit booking and long liquidation too were seen ahead of the near-month futures expiry in the international as well as in the domestic market,'' Mer noted, adding that global commodity exchanges have increased margin requirements on gold and silver, which may lead to an increase in volatility. On the outlook, he said, ''We may see more corrective moves in the next couple of trading sessions, after which prices may see some recovery and consolidate''.

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