Gold and Silver Prices Dip After Record Highs
On January 30, gold and silver prices saw a decline following their record highs in the previous session. This drop came as investors took profits and the US dollar strengthened.
During intraday trading, MCX gold February futures dropped by 1.03% to Rs 1,67,656 per 10 grams. Simultaneously, MCX silver March futures experienced a 3.42% decrease to Rs 3,86,200 per kg.
In the prior session, silver prices on MCX had reached Rs 4,20,048 per kg before falling over 6% to Rs 3,75,900 and eventually settling at the current level.
In the international market, spot gold prices fell by over 4% to $5,156.64 per ounce before rebounding to $5,346.42. Despite this, gold has shown a significant surge of over 20% this year, while silver has gained approximately 53% year-to-date.
Market analysts have noted that despite the short-term fluctuations due to profit-taking, the overall trend remains bullish. The recent rapid rise in prices has led to overbought conditions, prompting aggressive profit booking.
Experts suggest that silver remains within a strong rising channel, but caution that current prices indicate overbought conditions. Structural supply deficits and industrial demand are supporting the bullish sentiment for silver.
Key support for silver is identified at Rs 3,75,000 per kg, according to market analysts.
The strength of the US dollar, supported by the US Federal Reserve’s interest rate pause and ongoing geopolitical tensions, has influenced the market sentiment for precious metals.
A recent report from WhiteOak Capital Mutual Fund advises investors to consider taking profits on silver and reallocating into diversified Indian equity funds or blue-chip stocks. The report suggests trimming precious metals allocation to a safe-haven level and avoiding chasing further upside. The Gold-to-Silver ratio has dropped to 46:1 compared to the 10-year average of 80:1.
