Gold and silver prices continued to decline sharply on Tuesday, prompting investors to question whether this is a buying opportunity or the beginning of a deeper correction. The slide in prices mirrored a broader weakness in global bullion markets, driven largely by optimism surrounding improving trade relations between the United States and China, along with a stronger US dollar that dampened the appeal of precious metals as safe-haven assets.
On India’s Multi-Commodity Exchange (MCX), gold opened the day 0.7% lower at ₹1,20,106 per 10 grams compared to ₹1,20,957 in the previous session. Silver followed a similar path, falling 0.69% to ₹1,42,366 per kilogram. By market close, gold had extended its losses, dropping 2.06% to ₹1,18,461 per 10 grams, while silver declined to ₹1,41,424 per kilogram, down 1.36%. The fall marked a significant correction following a strong two-month rally in bullion prices.
Analysts attribute this pullback to a combination of factors. Rahul Kalantri, Vice President of Commodities at Mehta Equities Ltd, said that after a sustained rally, both gold and silver came under “heavy selling pressure” as they slipped below key psychological levels — $4,000 per ounce for gold and $47 per ounce for silver. According to him, the rally’s reversal was primarily due to a strengthening dollar index and renewed optimism surrounding trade discussions between the US, China, and India. He also noted that progress in peace negotiations in Gaza helped ease geopolitical tensions, thereby reducing safe-haven demand. However, he pointed out that a weaker Indian rupee continues to lend some support to domestic bullion prices at lower levels.
With macroeconomic sentiment shifting, investor attention has now turned to upcoming central bank policy decisions. The US Federal Reserve is widely expected to announce a 25-basis-point rate cut, encouraged by recent soft inflation readings. Meanwhile, the European Central Bank and the Bank of Japan are anticipated to maintain their existing policy stances. Kalantri highlighted key technical levels, stating that gold currently has support around $3,940–$3,905 and faces resistance near $4,055–$4,100.
Market experts warn of heightened short-term volatility as traders navigate the changing economic landscape. Darshan Desai, CEO of Aspect Bullion & Refinery, said the immediate direction of gold prices will depend heavily on developments in trade negotiations and central bank decisions. “Safe-haven demand is weakening due to renewed optimism about a potential US–China trade deal and a stronger dollar,” he observed. “Those treating gold as a hedge should brace for short-term fluctuations and sharp market swings.” He also cautioned that if the Federal Reserve signals fewer rate cuts than expected, it could add further downward pressure on gold prices.
Despite the correction, many analysts view the current weakness as temporary rather than a long-term trend reversal. Should geopolitical tensions resurface or central banks adopt a more dovish monetary stance, gold and silver could rebound strongly. For now, experts suggest that investors adopt a cautious, watchful approach and monitor how prices behave over the next few sessions before making significant commitments in the bullion market.
