MCX Gold Drops Over ₹6,700 From Peak as Silver Sees Heavy Profit Booking

Today MCX gold and silver prices saw a sudden and sharp fall. This came just a day after both metals touched all time highs. Gold became cheaper on MCX which was trading near ₹1,51,774 per 10 grams. Gold had climbed close to ₹1,58,475 a day earlier. Silver prices also corrected strongly. MCX silver slipped to nearly ₹3,18,590 per kg from its previous peak of about ₹3,35,521. The fall surprised many small investors who entered the market during the recent rally.

Safe Haven Demand Weakens As Global Trade Mood Improves

Gold and silver are often seen as safe haven assets. Investors rush towards them during fear or global uncertainty but this time, the mood changed quickly. Trade tensions between the United States and the European Union eased after high level discussions in Davos. US President Donald Trump stepped back from plans of new trade tariffs on European nations. With tensions cooling down, fear in the market reduced. As confidence returned, investors moved money away from gold and silver. This shift lowered demand and pushed prices down sharply in a single trading session.

Strong US Dollar Adds Pressure On Gold And Silver Prices

Another major reason behind the MCX gold price crash was the stronger US dollar. After the positive trade developments, the dollar gained strength in global markets. Gold is priced in dollars worldwide & when the dollar becomes stronger, gold turns costlier for buyers using other currencies. This reduces global demand. Silver also follows a similar trend. The stronger dollar made precious metals less attractive for overseas investors. As buying interest dropped, prices corrected fast. Indian markets reflected this global movement clearly during today’s trading session.

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Heavy Profit Booking Follows A Fast And Overheated Rally

The recent rise in gold and silver prices was very steep. Just one day earlier, gold surged by nearly ₹7,900 per 10 grams on MCX. Silver also jumped sharply within a short period. Such fast rallies often lead to profit booking. Traders who entered at lower levels decided to lock in gains. Selling increased across futures and ETFs linked to precious metals. Some gold-related exchange traded funds fell by up to 21 percent. This wave of selling added more pressure and turned the correction into a sharp price crash.

Market Experts Call It A Correction, Not A Trend Reversal

Market analysts believe the fall in MCX gold and silver prices is a short-term correction. They do not see it as the end of the bullish trend. Experts point out that the crash was driven by sentiment change. It is not by weak fundamentals. Global interest rates, inflation risks and long-term demand still support precious metals. However some cooling was expected after record highs. Now, the investors are advised to be cautious. Price swings may continue as global news keeps changing market direction.