Precious metals witnessed a sharp sell-off in early trading on Wednesday, with gold and silver prices tumbling on the Multi Commodity Exchange (MCX). The decline was primarily attributed to investors booking profits after a recent rally, leading to a notable correction in the commodity markets.
Sharp Decline in Morning Trade
In morning trade on Wednesday, 31st December 2025, gold prices on the domestic futures exchange dropped by approximately 1%. The fall in gold, however, was overshadowed by a steeper crash in silver, which plummeted by a significant 6% on the MCX. This divergence highlighted heightened volatility and specific selling pressure in the white metal segment. Market analysts pointed to profit booking as the key driver behind the sudden downturn, as traders locked in gains ahead of the year-end.
Expert Analysis and Key Levels to Monitor
Financial experts swiftly weighed in on the movement, identifying crucial technical levels that investors should watch. For gold, they emphasized specific support zones that, if breached, could signal further downside. Conversely, resistance levels were outlined where the price might face selling pressure on any rebound attempt.
For silver, the analysis was more urgent given the magnitude of its fall. Experts highlighted that the 6% crash brought the metal to critical technical junctures. The key advice for traders was to monitor these defined levels closely for clues about the next directional move, whether it be a consolidation, a deeper correction, or a potential recovery.
Market Context and Trader Sentiment
The profit-taking activity reflects a cautious sentiment among market participants. After periods of upward movement, it is common for traders to liquidate positions to realize profits, especially around calendar year-ends. This activity can lead to increased short-term volatility, as seen in the Wednesday morning session.
The broader market context, including global price trends, currency fluctuations, and domestic demand factors, continues to play a role in shaping the trajectory of precious metals. However, the immediate trigger for the December 31 drop was squarely focused on localised profit booking on the MCX platform.
Investors and market watchers are now advised to keep a close eye on the expert-highlighted levels for both gold and silver. The coming sessions will be crucial in determining whether this drop is a temporary blip or the start of a more sustained corrective phase for precious metals in the Indian market.
