Record Highs Followed by Sharp Decline: Gold and Silver Prices Today

Mumbai (The Uttam Hindu): The shine of gold and silver, which made investors rich by reaching their all-time high last week, suddenly faded on Monday. As soon as the domestic futures market (MCX) opened, both the precious metals registered a huge decline. The main reason behind this decline is believed to be profit booking at record levels and weak international signals.

On Monday, gold for October delivery was trading at Rs 1,07,122 per 10 grams on the Multi Commodity Exchange (MCX) with a huge drop of Rs 606 (0.56%). It is worth noting that on Friday itself it had touched its highest level of Rs 1,07,807 per 10 grams. Similarly, gold for December delivery also fell by Rs 612 to Rs 1,08,176 per 10 grams.

Silver prices also saw a sharp decline. Silver for December delivery fell by Rs 977 (0.78%) to Rs 1,23,720 per kg. Let us tell you that on September 3, silver had reached its 14-year high of Rs 1,26,300 per kg.

According to market experts, the biggest reason for this decline is profit-booking. In the previous session, gold reached a record level of Rs 1,07,870 per 10 grams and silver Rs 1,27,000 per kg in Delhi's bullion market on Saturday. When prices reach such a high level, investors start selling to secure their profits, which suddenly increases the supply in the market and brings down the prices.

Apart from this, the trend of weakness persists in the international market as well. Gold futures on Comex fell 0.68% to $3,628.35 an ounce, while on Friday it was at a record level of $3,655.50.

Jigar Trivedi, Senior Research Analyst at Reliance Securities, says that while today's decline is the result of profit booking, another big trend is being seen in the market. China's Central Bank has been buying gold for the 10th consecutive month to reduce its dependence on the US dollar. China's gold reserves increased to 74.02 million troy ounces in August. However, this is a long-term factor, which may affect the prices in the future. At present, the market is waiting for the next trend after this correction.