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Gold, Silver Prices Plummet Over 9% in Live Trading
2 Feb
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.
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.
Regarding future price predictions, MCX gold faces immediate resistance around Rs 1.45 lakh, with caution advised until stability above Rs 1.32 lakh-Rs 1.35 lakh is achieved. Silver's critical support lies between Rs 2.60 lakh and Rs 2.55 lakh; a failure to hold this level could lead to further corrections. The short-term outlook for silver remains bearish with continued volatility expected.
