Gold and silver futures witnessed a significant decline on the final trading day of 2025, as market participants opted to lock in profits amid a challenging global environment. The sell-off was triggered by a combination of weak international cues and a strengthening US dollar, which pressured precious metal prices on domestic exchanges.
Sharp Decline in Precious Metals
The most active contract for gold, set for delivery in February, experienced a notable drop on the Multi Commodity Exchange (MCX). The price fell by Rs 1,098, which translates to a decline of 0.8 per cent. This brought the trading value down to Rs 1,35,568 for every 10 grams. The downward movement was not isolated to gold, as silver futures also followed suit, registering substantial losses during the session.
Key Drivers Behind the Fall
Analysts point to two primary factors that led to the year-end slump in bullion prices. Firstly, global market signals were weak, reducing the appeal of safe-haven assets like gold. Secondly, the US dollar exhibited strength, making dollar-denominated commodities such as gold more expensive for holders of other currencies. This dual pressure prompted traders, who had built positions earlier, to actively book profits before the close of the year, accelerating the downward price action.
Market Implications and Trader Sentiment
The decline on December 31, 2025, marks a cautious end to the year for commodity investors in India. The profit-booking activity indicates a risk-off sentiment among participants, who are reassessing their portfolios based on macroeconomic indicators. The movement on the MCX closely mirrored trends in international markets, highlighting the interconnected nature of global commodity trading. Market watchers will now focus on upcoming economic data and central bank policies for direction in the new year.
