Why did gold and silver prices crash on February 1st?

Gold and silver prices crashed over 9% on February 1st as investors booked profits after the metals reached record highs, indicating they were in overbought territory.

What is the long-term outlook for gold prices?

Despite the recent sharp fall, the long-term outlook for gold remains bullish, with gold rates in India having climbed over 90% in the past year.

What impact could the Union Budget have on gold and silver prices?

The Union Budget might introduce cuts in customs duty and GST rates for gold and silver, which could temporarily spur demand and ease prices.

Home / Business and Economy / Gold, Silver Prices Plummet Over 9% in Live Trading

Gold, Silver Prices Plummet Over 9% in Live Trading

2 Feb

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Summary

Gold and silver futures dropped over 9% during live trading.
Investors booked profits after gold and silver hit record highs.
Budget expectations of duty cuts could temporarily ease prices.

Gold, Silver Prices Plummet Over 9% in Live Trading

On Sunday, February 1st, gold and silver prices in India saw a dramatic fall during a special live trading session. MCX gold and silver futures each dropped by more than 9%. The price for 10 grams of gold fell below the Rs 1.40 lakh mark, erasing previous record highs.

This significant correction is attributed to profit-booking by investors after gold and silver reached unprecedented levels. Analysts noted that the metals were in an overbought territory, and the current selling pressure is an adjustment. Despite the steep drop, gold has still climbed over 90% in the past year, with spot gold and silver showing returns of 75% and 171% respectively over the same period.

The market is anticipating the Union Budget presentation, with investors hoping for reductions in customs duty and GST rates on precious metals. Such changes could temporarily boost demand and ease prices. Experts believe that rationalizing import duties and GST would enhance affordability and support demand recovery.