Gold and silver prices correct ahead of Diwali festivities
Precious metals have seen a sharp decline following a major rally, impacting domestic markets and international rates.
Gold and silver prices have undergone a significant correction following an extraordinary rally, according to reports by The Economic Times and The Federal. International gold has fallen nearly 30 per cent from its January record of $5,595 per ounce, while silver has also experienced a sharp decline towards $50 per ounce.
On October 30, MCX gold fell by Rs 4,206 per 10 grams, and MCX silver dropped by almost Rs 10,000 per kilogram in a single day, The Federal reported. Factors contributing to the weakness include rising US bond yields, dollar movements, inflation concerns, and profit booking.
The decline is also linked to rising crude oil prices, which have increased fears regarding global inflation. This has led to speculation that the US Federal Reserve may have less room to cut interest rates. Additionally, a sell-off in technology stocks on October 30 prompted some investors to sell safe-haven assets to raise cash.
Sunil Katke, National Head of Commodity at Retail, Kotak Neo, noted that precious metals appear to have entered an oversold zone. He suggested that long-term investors might consider buying in stages at current prices rather than attempting to time the market bottom perfectly.
Katke stated that gold could potentially reach $4,750 per ounce by Diwali 2027. He also projected that silver could move towards $75 per ounce, which is approximately Rs 2.5 lakh, if industrial demand remains strong.
