Silver has given up all its gains made this year, while gold is headed for a similar trend, as both precious metals have declined by 13% and over 5%, respectively, over the past week, according to The Hindu BusinessLine. The plunge was in sync with the global trend, where precious metals dropped to an eight-month low due to the dollar’s strength and hopes of the US Federal Reserve raising interest rates.
Price Levels and Declines
On Thursday, silver in the Mumbai spot market slid to ₹2,16,541 a kg, down from ₹2,36,070 at the start of the year. On the Multi Commodity Exchange (MCX), gold July contracts traded at ₹2,20,402 a kg. In the global market, silver traded at $58.03 an ounce at 1900 hours IST, down over 25% in the past month.
Gold was quoted at ₹1,39,873 per 10 gm in the Mumbai spot market. On MCX, gold August futures ruled at ₹1,42,656 per 10 gm. In the global market, gold recovered to $4,023 an ounce, still over 11% lower than a month ago.
| Metal | Current Price (India Spot) | Start of Year | Week Change | Month Change |
|---|---|---|---|---|
| Silver (₹/kg) | ₹2,16,541 | ₹2,36,070 | -13% (global) | -25% (global) |
| Gold (₹/10 gm) | ₹1,39,873 | — | -5% (approx.) | -11% (global) |
Fundamental Drivers
The decline is driven by a strong US dollar and expectations of additional US Federal Reserve rate hikes, which reduce investor appetite for non-yielding assets like gold and silver. Additionally, according to Renisha Chainani, head of research at Augmont, a sharp sell-off in AI stocks has triggered a broad risk-off wave spilling into precious metals. A temporary US-Iran ceasefire offered little relief, she said.
Expert Commentary
Colin Shah, MD of Kama Jewelry, said gold and silver were undergoing a price correction. “The near-term trend can still be volatile, particularly silver after the steep drop, but this doesn’t necessarily affect the overall dynamics,” he added.
Renisha Chainani noted that gold and silver are extending their losing streak even as three simultaneous headwinds persist: a strong dollar, rate hike expectations, and the risk-off sentiment.
Jateen Trivedi, VP Research Analyst - Commodity and Currency at LKP Securities, said market participants will now shift focus to next week’s US non-farm payrolls and unemployment data, which are expected to provide fresh direction for gold and the dollar. “Volatility is likely to remain elevated until the release of these key economic indicators,” he said.
Platinum and Palladium
Platinum and palladium, part of the precious metals complex, have also been hammered. Platinum was quoted at $1,585 an ounce, a 7.5% decline over the past week and a 19% fall since last month. Palladium ruled at $1,182.50, down 8% week-on-week and nearly 16% from a month ago. Both metals have declined by 24% and 28%, respectively, this year.
Outlook and Key Data
Colin Shah said periods like these typically attract value buying in physical-demand-led markets such as India when prices soften. “This drop in prices still looks more of a healthy correction than a structural break, and the long-term fundamentals are still bullish for precious metals,” he said.
Renisha Chainani said current price levels may attract steady central bank buying, which held firm through May. However, persistent inflation concerns at the Fed are expected to cap investment demand and keep near-term risks skewed to the downside.
Gold soared to $5,608 and silver to $121.62 an ounce on January 29 this year. After the Iran war broke out on February 28, precious metals have been witnessing a downtrend. Gold has shed 19% since peaking, while silver has lost 53%.
Traders will watch the upcoming US employment data for the next directional cue.
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