Gold and Silver Prices Decline in Delhi Amid Subdued Demand
Precious metal prices experienced a notable downturn in the national capital on Tuesday, with both gold and silver falling by up to 2 per cent. This decline was driven by weak demand and unfavorable global market conditions, impacting investors and traders alike.
Silver and Gold Prices Drop in Bullion Market
According to the All India Sarafa Association, silver prices decreased by Rs 5,000, or 2 per cent, settling at Rs 2,45,000 per kilogram, inclusive of all taxes. This marks a drop from Monday's closing level of Rs 2,50,000 per kg. In the bullion market, gold of 99.9 per cent purity depreciated by Rs 2,200, or 1.4 per cent, to Rs 1,57,000 per 10 grams, also inclusive of taxes. The yellow metal had previously closed at Rs 1,59,200 per 10 grams.
Analysts Point to Global Factors
Kaveri More, a commodity analyst at Choice Broking, attributed the fall in prices to low liquidity from Asian market holidays and softer US inflation data, which fueled expectations of future Federal Reserve rate cuts. In international markets, spot silver slipped by $1.65, or 2.15 per cent, to $74.96 per ounce, while gold traded 1.04 per cent lower at $4,938.70 per ounce.
Praveen Singh, Head of Commodities and Currencies at Mirae Asset ShareKhan, noted that spot gold extended its decline for the second consecutive day as investors adopted a cautious stance ahead of US-Iran talks in Geneva. Saumil Gandhi, a senior analyst at HDFC Securities, highlighted that gold's fragile hold above the $5,000-mark gave way to renewed selling pressure, exacerbated by the start of China's Lunar New Year holidays, which reduced buying interest from one of the key demand drivers.
Futures Market Also Under Pressure
In futures trade, silver prices declined more than 2 per cent to Rs 2.33 lakh per kilogram on the Multi Commodity Exchange (MCX), tracking weak global trends and low liquidity amid holidays across major Asian economies. Silver contracts for March delivery plunged by Rs 6,330, or 2.64 per cent, to Rs 2,33,561 per kilogram in a business turnover of 5,820 lots. Internationally, Comex silver futures fell by $3.56, or 4.58 per cent, to $74.39 per ounce.
Jigar Trivedi, a senior research analyst at IndusInd Securities, explained that silver dropped over 2 per cent to below $76 per ounce due to subdued liquidity amid market holidays in China, Hong Kong, and other parts of Asia. He added that Chinese traders had driven a speculative surge in precious metals in January before a dramatic reversal, prompting authorities to curb market risks through various measures.
Gold Futures Face Downward Pressure
Gold prices in the futures market dropped more than 1 per cent to Rs 1.52 lakh per 10 grams on Tuesday, driven by easing safe-haven demand amid improving geopolitical sentiment and a strong US dollar. On the MCX, gold contracts for April delivery depreciated by Rs 2,228, or 1.44 per cent, to Rs 1,52,532 per 10 grams in a business turnover of 7,553 lots. In the global market, Comex gold futures for the April contract declined by $119.6, or 2.37 per cent, to $4,926.7 per ounce.
Gaurav Garg, a research analyst at Lemonn Markets Desk, stated that gold traded on a softer note as prices consolidated after recent volatility, with investors booking profits and reacting to a firmer US dollar and shifting interest-rate expectations from the Federal Reserve. Renisha Chainani, head of research at Augmont, noted that safe-haven demand eased as geopolitical tensions moderated and the US dollar strengthened.
Market Outlook and Future Trends
Chainani further explained that comments from US President Donald Trump indicating indirect US involvement in upcoming nuclear discussions with Iran raised hopes of diplomatic progress, while fresh Ukraine-Russia talks reduced immediate tensions and improved risk appetite. As risk sentiment improved, some investors reduced defensive positions in precious metals. Market attention is now shifting to the Federal Reserve's January meeting minutes for cues on the future interest rate outlook.
Analysts emphasized that while both gold and silver are undergoing a volatile corrective phase in 2026 following last year's strong rally, the broader multi-year bullish trend remains intact. The current weakness is largely viewed as consolidation rather than a trend reversal, with market participants closely monitoring key developments such as the US ADP employment report and geopolitical events that could influence risk sentiment and demand for safe-haven assets.
