Silver becomes ₹9000 cheaper, gold also falls; will prices drop further?

New Delhi: For some time now, the prices of gold and silver were reaching record highs every day. Silver prices have increased almost three times in a year, while the price of gold has risen by about 80 percent. The record high level for silver is Rs 3.35 lakh per kg, while the record high for gold is Rs 1.58 lakh.

However, a sharp decline in prices was seen in the Multi Commodity Exchange (MCX) on Thursday. In the morning, silver for March 5th futures was Rs 20,000 cheaper and gold for February 5th futures was Rs 4000 cheaper, but by 6:20 pm, silver had fallen by Rs 9185 to trade at Rs 3,09,307 per kg.

Similarly, gold for February 5th futures also fell sharply. By 6:20 pm, the price of 10 grams of gold on MCX had decreased by Rs 1282 to Rs 151580. The major reason for the fall in gold and silver prices is being attributed to the statement of US President Donald Trump.

What did Trump say?
Donald Trump said that a deal between the US and India would be finalized soon. At the World Economic Forum in Davos, Trump spoke about the trade deal between the US and India with Prime Minister Narendra Modi and said that a great trade deal is going to happen between them. This had an impact on gold and silver, as investors’ confidence in the stock market increased, and profit booking started in safe investments like gold and silver.

Trump’s second statement is regarding Greenland. He has withdrawn the threat of imposing a 10 percent tariff on 8 European countries and said that a plan will be presented for Greenland that will be good for both European countries and the US. This statement has reduced the situation of conflict and tension. This has led to profit-taking dominating the gold and silver markets.

Reasons for the decline:
Besides Trump’s statements, a major reason for the fall in gold and silver prices is the selling pressure in silver and gold ETFs. On Thursday, silver and gold ETFs fell by up to 16%, which also led to a decline in the price of the metals. The US dollar has strengthened. The dollar strengthened against the rupee and other currencies, which affected safe-haven investments like gold and silver.

Will gold and silver prices fall further?
The decline in gold and silver prices is due to profit-booking and correction. Experts believe this decline is due to a decrease in safe-haven demand; it is not a recession or a structural decline. Experts say that in the short term, there may be some pressure on silver and gold rates, but in the long term, they will remain strong. In the long term, purchases by central banks, global economic uncertainty, and the risk of rising inflation could drive up gold and silver prices.

What should investors do?
If you are planning to invest in gold and silver, you should think in terms of the long term. Experts say that these metals may experience fluctuations in the short term. In such a situation, buying on dips could be the right strategy. In the long term, they can yield profits.