Gold, silver prices cool after record highs; jewellery sales jump 35–40% during Dhanteras
Mumbai, Oct 21: Gold and silver prices fell on Tuesday as investors booked profits after both metals hit record highs in the previous session, even as festive jewellery sales during Dhanteras jumped 35–40 per cent across India.
Silver Exchange Traded Funds (ETFs), which had delivered stellar one-year returns of around 65–70 per cent, also saw a sharp correction as global prices cooled following improved physical supply and easing safe-haven demand. Silver had turned hot earlier this month when global spot prices surged past $40 an ounce amid concerns of a physical shortage. The rally extended further, crossing $50 in mid-October.
However, by the end of last week, prices began to retreat as easing trade tensions reduced safe-haven demand. On October 17, silver prices in the US fell by over 6 per cent, and the correction soon spilled over into Indian markets. According to the India Bullion and Jewellers Association (IBJA), silver prices in India fell 7 per cent on October 20, slipping from Rs 1,71,275 per kg to Rs 1,60,100 per kg. The decline directly impacted silver ETFs, which mirror domestic silver prices.
Data from Ace MF shows that silver ETFs logged steep single-day losses, with most funds dropping up to 7 per cent on October 20.
Analysts noted that the ETFs are now trading at or below fair value -- a sign that investor demand has started to cool after months of heavy inflows.
Meanwhile, in the international market, gold prices also softened after touching record highs on Monday. Spot gold was down 0.3 per cent at $4,340.29 per ounce as of 0248 GMT, after hitting an all-time high of $4,381.21 in the previous session. US gold futures for December delivery eased 0.1 per cent to $4,356.40 per ounce, as investors booked profits amid expectations of further interest rate cuts by the US Federal Reserve. The Multi Commodity Exchange (MCX) will also observe special Muhurat trading today, October 21, with a pre-open session from 1:30 p.m. to 1:44 p.m., followed by the Muhurat trading window from 1:45 p.m. to 2:45 p.m.
