Kolkata: Gold and silver dropped sharply on the MCX on Thursday, after US President Donald Trump’s remarks on Iran heightened geopolitical tensions and triggered volatility across global markets.
Silver prices closed about 5.6% lower at ₹2,29,888 per kg, while gold fell 2.3% to ₹1,50,145 per 10 gm.
If this trend continues, then there could be an uptick in demand during the Akshaya Tritiya festival, which is on April 19, jewellers said.
In the spot market, gold was last trading at ₹1.45 lakh per 10 gm compared with ₹1.50 lakh on Wednesday without the 3% GST. Silver was at ₹2.2 lakh per kg against ₹2.4 lakh the previous day.
Precious metal prices have fallen sharply amid the Iran war, as concerns about accelerating inflation due to supply disruptions, a stronger dollar and increasing expectations of interest-rate hikes have affected investor interest. Prices have been highly volatile in recent days, moving in tandem with news on the conflict.
Analysts feel the volatility will continue and warned investors to remain cautious.
Bullion took a sharp U-turn on Thursday, putting its four-day winning streak at risk as markets grappled with mixed geopolitical signals and shifting rate expectations.
Divya Mandaliya, commodity research analyst at Anand Rathi Share and Stock Brokers, said: “This comes on the back of a tough March, where bullion slid nearly 12%, marking its worst monthly fall since the Global Financial Crisis of 2008, as macro pressures outweighed geopolitical support.”
In Thursday’s session, gold dropped after making early gains as Trump delivered a mixed message signalling both a possible end to the conflict and warning of sharper strikes ahead. Ongoing uncertainty around the Strait of Hormuz and Iran’s stance is keeping marknerves on edge.
“Gold’s trajectory will depend on whether inflation concerns or growth slowdown fears dominate. Technically, immediate support in the international market is seen at $4,460 per ounce and $4,360 per ounce, while resistance stands at $4,800 per ounce,” Mandaliya added.
In the international market, gold was trading at $4,622.6 per troy ounce Thursday, while silver was at $71.4 per ounce.
Gold and silver exchange-traded funds fell by up to 4% tracking the decline in prices of the precious metals.
“Although this volatility in precious metal prices might seem alarming, the overall trend remains positive. The current correction in prices is due to profit-taking, which is a positive sign for the market,” said Aksha Kamboj, vice-president of the India Bullion & Jewellers Association. “Moreover, the current volatility in the silver market is attracting physical buying in India, which is a positive sign. Investors should not invest in the silver market through lump-sum investments. Instead, they should adopt a staggered investment strategy.”
In the near term, this volatility may make consumers cautious, he said, adding: “Hut it is also likely to encourage opportunistic buying at lower price levels.”
