Gold and Silver Prices Crash: Experts Predict Short-Term Volatility

Gold and silver prices witnessed a steep fall in Tuesday’s trading session, following global market cues. The optimism around easing trade tensions between the US and China, along with a stronger US dollar, weighed heavily on precious metals. The sudden correction has prompted investors to reassess their short-term strategies.

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Prices Drop on MCX

On the Multi Commodity Exchange (MCX), gold opened 0.7% lower at Rs.1,20,106 per 10 grams, down from Rs.1,20,957 in the previous session. Silver too followed the trend, slipping 0.69% to open at Rs.1,42,366 per kg. By the market close, gold was down 2.06% at Rs.1,18,461 per 10 grams, while silver settled at Rs.1,41,424 per kg, marking a 1.36% decline.

Global Pressure Builds

After a strong two-month rally, gold and silver came under heavy selling pressure as global sentiment shifted. According to Rahul Kalantri, VP – Commodities at Mehta Equities Ltd, the correction was expected after prices breached psychological levels — $4,000 for gold and $47 per ounce for silver. He attributed the fall to a stronger dollar and optimism over US trade discussions with China and India, which have reduced demand for safe-haven assets.

Geopolitical Relief Affects Demand

Progress in Gaza peace talks has also eased global tensions, further reducing safe-haven buying. However, Kalantri noted that a weaker rupee is lending limited support to domestic bullion prices, preventing a steeper fall.

Central Banks in Focus

With uncertainty in global markets, all eyes are now on upcoming central bank meetings. The US Federal Reserve is widely expected to announce a 25-basis-point rate cut following soft inflation data. Meanwhile, the European Central Bank and Bank of Japan are likely to maintain their current stances. Kalantri mentioned that gold may find support around $3,940–3,905 and face resistance near $4,055–4,100.

Short-Term Volatility Likely

Experts predict short-term volatility in gold and silver prices. Darshan Desai, CEO of Aspect Bullion & Refinery, said the near-term outlook depends on trade negotiations and policy decisions. “Gold’s safe-haven appeal has weakened amid optimism over a potential US–China trade deal,” he said, cautioning investors to brace for sharp price swings.

Temporary Weakness or Trend Shift?

Analysts believe the current dip might be temporary, not a complete trend reversal. If global uncertainties rise again or central banks signal more rate cuts, bullion could bounce back strongly. For now, experts suggest staying cautious and monitoring the next few sessions before making fresh investment moves.

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