Precious Metals Lose Lustre After Recovery

Chennai: After rebounding on Wednesday, gold and silver prices once again tumbled on Thursday. While gold lost Rs 3600 per 10 gm in the domestic spot market, silver made a bigger correction of Rs 30,000 per kg. Silver ETFs too declined around 12 per cent after the metal prices fell. However, UBS has predicted that gold prices can climb $6200 this year.

In the international gold prices fell 4.65 per cent of $234 per ounce to $4789 and silver declined more by 18.6 per cent to $73.57 per ounce. In the Multi-Commodity Exchange, the correction was milder. Gold dropped by 3.75 per cent to Rs 1,48,455 per 10 gm and silver fell 7.39 per cent to Rs 2,39,000 per kg.

The Delhi spot market, gold shed Rs 3600 per 10 gm to Rs 1,61,400 and silver lost Rs 30,000 per kg while falling to Rs 2,68,000.

Both gold and silver ETFs recorded drop in prices on Thursday, while gold ETFs fell around 5 per cent, the fall was steeper around 12 per cent in silver ETFs.

Both gold and silver almost erased their two-day rebound as the US dollar strengthened on Friday, supported by signals from the Federal Reserve that interest rate cuts may come more slowly than markets once hoped. Sentiment was further weighed by Kevin Warsh’s nomination as Fed chair, seen as favouring tighter policy. Meanwhile, signs of easing geopolitical tensions between the US and Iran trimmed safe-haven appeal, said Kedia Commodities.

Further, mixed data from the US showed weaker jobs growth but stronger services activity.

Meanwhile, UBS analysts, in a report, said that gold’s rally was far from over, and prices could climb as high as $6,200 an ounce by mid-2026. There could be some short-term consolidation in prices with consolidation between $4,500 and 4,800/oz in the coming days due to volatility from margin calls.

However, UBS warned that silver is likely to stay volatile after its sharp rally in recent months and the steep correction that followed.