Silver, gold prices fall up to 10% on strong dollar, global selloff after hawkish Fed remarks

Silver prices fell on Thursday, February 5, after rising for two consecutive sessions, declining by as much as 10% to ₹2.68 lakh per kg, while gold fell by nearly 3% to ₹1.6 lakh per 10 gram on the back of a rising US dollar and a global selloff. 

The white metal slumped by ₹30,300, or 10.16%, to ₹2,68,000 per kg against Wednesday’s closing price of ₹2,98,300 per kg. Gold prices also declined, slipping 3% to ₹1,60,600 per 10 gram after settling at ₹1,65,100 per 10 gram in the previous session. 

Due to renewed selling pressure and heightened volatility driven by a stronger US dollar and hawkish remarks from a Federal Reserve official, bullion prices fell, a PTI report said, quoting a commodity analyst.

International markets

In the international market, silver and gold dropped by up to 13%. Spot silver fell by 13.5% to $11.94, while gold fell by 2.77% ($137.32) to $4,826.99 per ounce. 

The dollar index, which measures the greenback's performance against a basket of six major currencies, was up 0.25% at 97.86. A stronger dollar generally translates into lower bullion prices, which is why the higher dollar index weighed heavily on commodities denominated in the US currency.

"Spot gold tumbled on Thursday as the US dollar strengthened and caution prevails ahead of the US-Iran talks in Oman tomorrow," the PTI report quoted another analyst, Praveen Singh, Head of commodities, Mirae Asset Sharekhan, as saying.

Gold and silver prices fell by up to 13% last week, but recovered this week due to a weak dollar and global dynamics. In Thursday’s session, the precious metals fell again after the recovery. 

In China, Shanghai silver futures fell as much as 15% during the session on Thursday. 

"As China sold aggressively, global markets reacted," the PTI report quoted Manav Modi, Analyst, Commodities at Motilal Oswal Financial Services, as saying.

Gold, silver futures

Silver futures on the Multi Commodity Exchange (MCX) fell by 12% to an intraday low of ₹2,68,850 per kg after closing at ₹2,36,588 per kg on Wednesday. 

Meanwhile, gold futures fell by 2.9% to ₹1,48,455 per 10 gram on the MCX. The contracts closed at ₹1,53,046 per 10 gram in the previous session.