In a dramatic downturn, silver prices plunged by Rs 21,600 per kilogram and gold fell by Rs 3,200 per 10 grams in Indian markets on Thursday, mirroring a global selloff in precious metals. The sharp decline was driven by a stronger US dollar and robust US economic data that dampened expectations of an early interest rate cut by the Federal Reserve.
Global Factors Trigger Selloff
The selloff was sparked by better-than-expected US employment and manufacturing data, which suggested the economy remains resilient. This reduced the likelihood of the Federal Reserve cutting interest rates soon, leading to a surge in the dollar index and a collapse in precious metal prices. International spot gold dropped over 3% to around $2,160 per ounce, while silver fell more than 5% to near $25 per ounce.
Impact on Indian Markets
In the domestic market, gold futures on the Multi Commodity Exchange (MCX) for April delivery plunged by Rs 3,200 to Rs 65,300 per 10 grams, while silver futures for May delivery crashed by Rs 21,600 to Rs 73,500 per kg. Physical gold rates in Delhi also fell sharply, with 24-carat gold dropping to Rs 65,500 per 10 grams and 22-carat gold to Rs 60,500 per 10 grams. Similarly, silver in the spot market was quoted at Rs 73,500 per kg.
Market Outlook
Analysts expect further volatility in precious metals as traders await the US non-farm payrolls data due on Friday. A strong jobs report could reinforce the Fed's hawkish stance, putting additional pressure on gold and silver. Conversely, any signs of economic weakness might revive safe-haven demand. Investors are advised to monitor global cues and adjust their positions accordingly.
