In a significant market reversal, silver prices pulled back sharply from their all-time peak on Tuesday, while gold concluded a four-session winning streak. This shift was primarily driven by investors locking in gains after a substantial rally, a practice known as profit booking.
Precious Metals See Sharp Correction
On the Multi Commodity Exchange (MCX), silver futures for July delivery plunged by Rs 1,713, or 1.73 per cent, to settle at Rs 97,282 per kilogram. This decline came after the commodity had soared to a historic high of Rs 99,119 per kg during the trading session. Similarly, gold futures for August expiry dropped by Rs 197, or 0.25 per cent, ending the day at Rs 76,990 per 10 grams. This marked a halt to gold's consistent upward movement over the previous four trading days.
Factors Behind the Market Movement
Analysts pointed to a combination of domestic and international factors influencing the downturn. The primary catalyst was profit booking by traders and investors following the meteoric rise in silver prices, which had made significant gains in recent weeks. In the global markets, spot gold was quoted lower at $2,423.19 per ounce, while silver also traded weaker at $31.73 per ounce. This international trend provided further impetus for the correction in Indian markets.
Market experts noted that the bullish sentiment for precious metals remains intact over the long term, supported by expectations of interest rate cuts by the US Federal Reserve and ongoing geopolitical tensions. However, the sharp ascent necessitated a period of consolidation. "The rally was due for a pause," stated one analyst, highlighting that such corrections are healthy for the market and can create fresh buying opportunities for investors.
Outlook and Market Sentiment
Despite the day's losses, the overall outlook for both gold and silver in 2024 is considered positive by many commodity strategists. The demand for these metals as a hedge against inflation and currency fluctuations continues to be strong. The immediate support level for gold is seen around Rs 76,500 per 10 grams, while resistance is near Rs 77,500. For silver, support is positioned near Rs 96,500 per kg, with resistance at the Rs 99,000 level.
The activity in other precious metals also reflected the broader trend. On the MCX, July platinum futures fell by 0.67 per cent, closing at Rs 3,119 per gram. This coordinated movement across the precious metals complex underscores the dominant role of profit-taking in Tuesday's trading session. Investors are now closely watching for upcoming US economic data and central bank commentary for further directional cues.
