Gold, silver prices dip after aggressive profit booking from record levels

Gold and silver prices fell in early trade after hitting record highs, as profit booking emerged and the dollar strengthened. MCX silver slid sharply while gold eased, though analysts say the broader trend remains bullish despite short-term overheating concerns persist

Mumbai: Gold and silver prices fell on Friday, after hitting record highs in the previous session as investors booked profits and the US dollar gained strength.

MCX gold February futures fell 1.03 per cent to Rs 1,67,656 per 10 grams around 10 am on an intraday basis. Meanwhile, MCX silver March futures dipped 3.42 per cent to Rs 3,86,200 per kg. The silver prices had touched Rs 4,20,048 per kg on MCX in the previous session and later fell over 6 per cent to Rs 3,75,900 before it retraced to the current level.

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International markets saw spot gold prices declining over 4 per cent to $5,156.64 per ounce. Later, it retraced to $5,346.42. However, the yellow metal marked a more than 20 per cent surge this year. Year-to-date, the white metal has gained around 53 per cent. The broader structure remains firmly bullish, though the market is witnessing fast intraday swings, reflecting short-term overheating and tactical profit booking after the recent sharp rise, market watchers said.

Analysts said that the metal remains in a strong rising channel, but the recent move has left prices overbought, resulting in aggressive profit booking. Structural supply deficits and industrial demand continue to underpin the bullish bias, they added.

Market watchers said that the key support for silver lies at Rs 3,75,000 per kg. The dollar index inched higher from the support it gained from the US Federal Reserve’s pause in interest rates. Moreover, geopolitical tensions also stayed elevated amid reports that US President Donald Trump is weighing options against Iran.

A recent report by WhiteOak Capital Mutual Fund said that investors should consider booking profits on silver and rebalance into diversified Indian equity funds or blue chip stocks. The report from investors should trim precious metals allocation back to a safehaven allocation level and stop chasing further upside. The current Gold-to-Silver ratio has collapsed to about 46:1 versus a 10-year average near 80:1.