Gold cheaper by Rs 13,000, silver down Rs 29,000. Will prices fall more now?

New Delhi: Gold and silver prices have seen a sharp fall from their recent highs, as global cues, profit booking and a stronger US dollar pulled down rates on the Multi-Commodity Exchange (MCX). 

Gold has fallen by more than Rs 13,000 from its record level in just a 11 days, while silver is down by about Rs 29,000 per kg. 

On Tuesday, gold opened on MCX at Rs 1,20,106 per 10 grams, down about 0.7 per cent. Silver opened at Rs 1,42,366 per kg, down 0.69 per cent. 

By the close, pressure had intensified. Gold was trading 2.06 per cent lower at Rs 1,18,461 per 10 grams and silver was 1.36 per cent lower at Rs 1,41,424 per kg. Prices are showing only mild recovery today. 

The fall looks even sharper when compared to recent peaks. As per MCX data, gold had crossed Rs 1.32 lakh per 10 grams at its record high. It is now around Rs 1.18 lakh per 10 grams, which means a decline of more than Rs 13,000. 

Silver had hit around Rs 1.70 lakh per kg at the peak and is now close to Rs 1.41 lakh per kg, implying a drop of nearly Rs 29,000 from that high. 

Gold prices in India have mirrored the global correction, declining sharply after peaking around Dhanteras and Diwali (October 17–20) amid festive buying frenzy.

The drop is fueled by profit-taking, a stronger U.S. dollar, and easing U.S.-China trade tensions, which have reduced safe-haven appeal.

Commodity analysts say this correction comes after a strong two-month rally in both metals. Rahul Kalantri, Vice-President (Commodities) at Mehta Equities Ltd, said traders booked profit once gold and silver slipped below key psychological levels. 

According to him, heavy selling came in as gold moved near 4,000 dollars per ounce and silver neared 47 dollars per ounce. He said the fall was also driven by a stronger US dollar and renewed optimism around easing trade tensions between the United States and China, and expectations of better trade talks with Asian partners. 

Geopolitical risk has also cooled. Experts said there is some movement towards dialogue over Gaza, which has reduced immediate fear in global markets. When tension eases, investors move out of safe-haven assets like gold, and that brings prices down. 

At the same time, Kalantri noted that a weaker rupee is giving some support to domestic bullion prices at lower levels, by preventing an even steeper fall in Indian terms. He said gold is currently finding support around 3,940 to 3,905 dollars per ounce, while resistance is in the 4,055 to 4,100 dollars per ounce band. 

Traders are now watching central banks. After recent softer inflation numbers, markets expect the US Federal Reserve to announce a rate cut of 25 basis points. 

The view is that the European Central Bank and the Bank of Japan may keep their current policy stance unchanged. If this plays out, analysts believe gold and silver could see more downside in the near term. 

The reason is that a firm dollar and confidence in the global outlook tend to reduce the immediate appeal of holding bullion as protection. 

Darshan Desai, CEO of Aspect Bullion and Refinery, said the short-term direction will depend on how trade negotiations develop and what major central banks signal in their policy commentary. 

He said optimism over a possible United States–China trade understanding, along with a strong US dollar, has already weakened safe-haven buying in precious metals. 

Desai added that prices may stay volatile and, if the US Federal Reserve hints at a smaller-than-expected rate cut, gold could come under further pressure.