Gold-Silver Crash: Why Did The Bubble Burst? Know Why Gold, Silver Became So Cheap

New Delhi: Gold and silver prices witnessed a sharp decline on Friday. ​​The price of silver fell by ₹85,000 in 24 hours. Gold prices also saw a significant drop. This massive decline came after silver had reached nearly ₹4.20 lakh and gold was close to ₹2 lakh.

On Friday, at 3:30 PM, the price of 1 kg of silver for March futures on MCX fell by approximately ₹65,000 to ₹3,35,001. However, on Thursday evening, the price of silver had risen to its all-time high of ₹4,20,048. This means that in just 24 hours, the price of silver fell by approximately ₹85,000.

Similarly, the price of gold also saw a sharp decline. Gold was at its record high of ₹1,93,096 on Thursday, January 29th, but on Friday, it fell by ₹16,000 to ₹1,67,406. This means that gold prices fell by ₹25,500 in 24 hours.

What were the prices on Thursday?

In the futures market on Thursday, silver not only crossed the ₹4 lakh per kg mark, but also saw a tremendous surge from there. The price of silver rose by ₹34,000 on Thursday to reach its all-time high of ₹4,20,048. Similarly, in the futures market on January 29th, gold rose by ₹16,000 to reach its record high of ₹1,93,096. However, both these precious metals have now seen a sharp decline.

Why this sudden sharp decline?

Experts say that this is due to profit-taking, as gold and silver prices had been rising rapidly for several days, and their prices were setting new records every day. Silver had crossed the ₹3 lakh to ₹4 lakh level in just a few weeks. Gold has also shown significant gains. As a result, investors are booking profits to protect their gains.

Some experts even say that as soon as selling pressure intensified in gold and silver, short sellers entered the market and shorted silver during trading, causing a sharp drop in its price.

Prices of silver and other metals also fell in the international market, which led to a decline in prices on the MCX in India.

Donald Trump's statement that he wants to replace Federal Reserve Chairman Jerome Powell with his preferred candidate strengthened the dollar and eased some global tensions, leading to a fall in gold and silver prices.

Significant decline in Gold and Silver ETFs?

Due to the sharp fall in gold and silver prices, the prices of silver and gold ETFs have also fallen rapidly. By the time the stock market closed, the prices of silver and gold ETFs had fallen by up to 20 percent. ICICI Silver ETF fell by 20.14 percent, Nippon India Silver ETF by 18.59 percent, and Tata Silver ETF by 13 percent.  As for gold ETFs, Tata Gold ETF fell by 9.16 percent, and Nippon India Gold ETF by 10.50 percent.