Gold prices tumbled by ₹14,000 per 10 grams and silver prices tanked by as much as ₹20,000 per kilogram in the national capital on Friday as investors booked heavy profits amid weak global trends and a rebound in the US dollar.
According to a report by news agency PTI, gold of 99.9 per cent purity plunged by ₹14,000, or 7.65 per cent, to ₹1,69,000 per 10 grams (inclusive of all taxes). The precious metal had hit an all-time high of ₹1,83,000 per 10 grams on Thursday, after rising by ₹12,000.
On the other hand, silver tumbled by ₹20,000, or nearly 5 per cent, to ₹3,84,500 per kilogram (inclusive of all taxes). The white metal had soared ₹19,500 to hit a record of ₹4,04,500 per kg in the previous market session.
Why did gold and silver prices fall on Friday?
According to commodity analysts, gold and silver prices tumbled on Friday as investors moved to aggressively book profits
“Gold and silver experienced a significant correction on Friday as investors moved to aggressively book profits following a recent record-breaking rally. This decline was mainly fuelled by the heavy liquidation of long positions by large institutional players, who sought to secure gains after a strong multi-session advance,” HDFC Securities’ Senior Commodities Analyst Saumil Gandhi, told news agency PTI.
He added that a recovery in the US dollar further pressured bullion.
“From a technical standpoint, both gold and silver had been trading in overbought territory over the past several sessions, heightening the risk of a corrective move,” Gandhi said, adding that the combination of stretched technical conditions, institutional profit-taking, and a recovery in the US dollar that is likely to continue adds pressure on bullion in the short term.
Gold and silver prices in the international market
In the international market, spot gold was trading 5.31 per cent, or $285.30 lower at $5,087.73 per ounce. The yellow metal tumbled by $425.86, or 7.92 per cent, to hit an intraday low of $4,945.26 per ounce.
Gold touched a new record of $5,595.02 before settling at $5,371.12 per ounce.
Spot silver also dropped $14, or 12.09 per cent, to $101.47 per ounce, after falling as much as 17.5 per cent in the intraday trade to $95.26 per ounce in the overseas trade. On Thursday, it hit a fresh peak of USD 121.45 per ounce.