Precious metal prices came under intense selling pressure in Delhi's spot bullion market on Tuesday, dragging silver below the crucial ₹2 lakh per kilogram threshold. Weak international cues and persistent strength in the greenback triggered a sharp selloff across counters. This marks the first time in over ten months that silver has fallen to this territory, while gold also registered losses as domestic buyers remained cautious.
Silver Plunges by ₹4,000 to Breach ₹2 Lakh Mark
According to data released by the All India Sarafa Association, silver dropped by ₹4,000 on Tuesday to settle at ₹1.98 lakh per kilogram. The sharp drop pulled the white metal to a fresh ten-month low, erasing recent recovery attempts. In the preceding session on Monday, silver had closed at ₹2.02 lakh per kilogram. Historical pricing records indicate that the last time silver traded near this band was on December 16, when rates stood at ₹1,98,500 per kilogram.
Gold Softens by ₹500 Amid Subdued Buying
Following the broader weak sentiment across precious metals, gold of 99.9 per cent purity also recorded a decline of ₹500 to close at ₹1,45,800 per 10 grams in the capital. The yellow metal had concluded trading at ₹1,46,300 per 10 grams on Monday. Retail participants and local jewelers held back fresh orders, reflecting broader hesitation as international rate expectations continued to shift.
Firm Dollar and Global Weakness Weaken Sentiment
Market analysts attributed the downward trajectory in domestic rates to international factors and currency dynamics. Jatin Trivedi, Vice President and Research Analyst for Commodity and Currency at LKP Securities, pointed out that a persistently robust US dollar and relentless corrections across overseas bullion markets have exerted downward pressure on domestic gold prices. Trivedi noted that volatility is likely to persist in the near term, expecting domestic gold rates to fluctuate within a target band of ₹1.40 lakh to ₹1.44 lakh per 10 grams.
In international trade, spot gold witnessed a minor dip to trade around $4,011.44 per ounce. Silver faced even steeper downward momentum, tumbling by more than 1 per cent to hover at $53.41 per ounce.
Silver Underperforms Gold as Industrial Demand Lags
Providing a sectoral assessment, Gaurav Garg, Head of Research at brokerage platform Lemon, highlighted that silver has continued to lag significantly behind gold. Garg noted that heavy selling pressure intensified once international silver fell below the critical benchmark of $54 per ounce. The metal is currently hovering near an eleven-month trough as market participants weigh subdued industrial off-take against macroeconomic uncertainties.
Focus Shifts to Federal Reserve Rate Decision
Commodity market participants are closely tracking the upcoming monetary policy meeting of the US Federal Reserve scheduled for October 28. Saumil Gandhi, Senior Commodity Analyst at HDFC Securities, observed that market participants are maintaining a watchful posture ahead of the policy outcome. The central bank's decision on the benchmark Federal Funds Rate, accompanied by commentary from Federal Reserve Chairman Kevin Warsh regarding the future path of interest rates, will play a decisive role in defining the subsequent trajectory for bullion prices worldwide.
