Prices dropped to ₹3.03 lakh per kg Thursday, after a record-breaking rally to ₹3.20 lakh per kilogram. MCX silver on Thursday corrected 9% from all-time highs. Gold, too, fell to ₹1.51 lakh per 10 gm on Thursday from ₹1.54 lakh on Wednesday.
“Silver’s rapid descent – dropping nearly 8% from its record peak – underscores its role as a high-velocity gauge of global risk,” said Aamir Makda, commodity & currency analyst, Choice Broking. “The sudden ‘Davos De-escalation’, marked by the withdrawal of tariff threats against European allies and a new NATO framework for the Arctic, has punctured the geopolitical bubble that drove the white metal to $95 per ounce.”
Makda said Thursday’s precipitous decline reflected profit-taking by investors after precious metals lately climbed in tandem with perceived risks to global trade volumes.
“While industrial demand for AI and green tech remains a long-term floor, the immediate evaporation of the ‘trade war premium’ has triggered a massive wave of profit-taking as investors rotate back into a surging equity market,” he said.
Rise & Fall
According to India Bullion & Jewellers Association (IBJA), silver prices on January 1 were ₹2.29 lakh per kg for the retail buyers without a 3% Goods & Services Tax (GST). This surged to a historic high of ₹3.2 lakh per kg on January 21.
Jewellers said the volatility in prices is keeping the consumers away from the precious metals.
Suvankar Sen, managing director of the listed jewellery firm Secco Gold & Diamond, said: “Consumers are waiting on the sidelines as the precious metals remain volatile. Those who have weddings in the family are buying lightweight gold jewellery. Over the past few days, we have seen people buying silver coins of 5 gm and 10 gm denominations as the prices moved up.”
Sen added that every dip is an opportunity to buy gold and silver as the prices are poised to head northwards this year. Varghese Alukkas, managing director of Jos Alukkas, which has 65 outlets in the southern states of the country, added: “The footfalls have come down today as prices dropped. People have gone on a wait and watch mode.
Navneet Damani, head of Research (Commodities) at Motilal Oswal Financial Services, added: “Silver has delivered sharp outperformance in a short span, and with the gold–silver ratio now near lower levels, the near-term risk-reward is turning more favourable for gold.
While we remain positive on both metals and silver continues to have longterm upside backed by industrial demand and tight physical market conditions, the recent rally has also increased near-term volatility. In this phase, a higher allocation to gold can help manage fluctuations while staying invested in precious metals.
