Gold and silver prices witnessed a sharp decline on Tuesday, tracking a global sell-off in commodity markets. The gold price dropped by ₹1,000, while silver prices tumbled by ₹2,000 per kg, bringing silver rates to ₹1,12,000 per kg. This steep fall has sparked discussions among traders, investors, and jewellers about the near-term outlook for the precious metals market.

Commodity traders reported that the fall in prices was primarily driven by a strengthening U.S. dollar and increased volatility in global equity markets. As risk-off sentiment gripped investors, many opted to liquidate their holdings in precious metals to cover losses in other asset classes.

On the Multi Commodity Exchange (MCX), gold futures were trading significantly lower, while silver contracts also showed heavy selling pressure. Internationally, gold prices fell below a key psychological level, which triggered further sell orders in electronic trading.

Analysts believe that the recent decline is part of a short-term correction phase, although the long-term demand for gold and silver in India may remain resilient due to seasonal buying patterns and the upcoming festive season. "The fall in prices could attract bargain buying, especially ahead of festivals like Dussehra and Diwali," said a market expert.

However, the strong U.S. jobs data and expectations of further interest rate hikes by the Federal Reserve have increased the attractiveness of the dollar, thereby reducing the appeal of gold as a safe-haven asset. Similarly, silver—often considered both a precious and industrial metal—faced additional pressure from slowing industrial demand.

In the retail market, jewellers noted a slowdown in customer visits as buyers waited for further price drops. Traders expect that if global market sentiment remains weak, gold prices could see additional declines in the short term, with silver following the same trajectory.

For investors, this sudden price drop presents both a risk and an opportunity. Those holding gold and silver as part of their portfolio might see lower valuations in the immediate term, but new investors could take advantage of the dip to accumulate precious metals at cheaper levels.

Market watchers advise closely monitoring the global economic indicators, U.S. monetary policy signals, and geopolitical developments, as these factors often have a direct impact on precious metal prices. With uncertainties looming in the financial markets, the path ahead for gold and silver remains volatile.

If the global market stabilises and the dollar weakens, a rebound in prices could follow. Until then, traders are expected to adopt a cautious approach, keeping an eye on international trends before making large commitments in gold or silver investments.

The Upcoming IPOs in this week and coming weeks are Studio LSD, Shreeji Shipping Global, Patel Retail.

The Current active IPO are Regaal Resources, Mahendra Realtors and Infrastructure, Bluestone Jewellery and Lifestyle, Icodex Publishing Solutions, Star Imaging and Path Lab, Medistep Healthcare, ANB Metal Cast.

Start your Stock Market Journey and Apply in IPO by Opening Free Demat Account in Choice Broking FinX.

Join our Trading with CA Abhay Telegram Channel for regular Stock Market Trading and Investment Calls by CA Abhay Varn - SEBI Registered Research Analyst.