silver and gold: After a steep decline, precious metals showed indications of a reversal on Tuesday, with gold and silver plunging from their previous session’s record highs.
MCX silver futures for March increased 4.08% to Rs 2,33,700 per kg, while MCX gold futures for February up 0.59% to Rs 1,35,744 per 10 grams.
On Monday, physical gold dropped 4.5% to $4,330.79 an ounce on international markets, while U.S. gold futures for February delivery ended the day 4.6% down at $4,343.60.
The decline came after an initial spike that saw silver reach $82.67 per ounce and gold reach $4,584 per troy ounce before both commodities were unable to maintain gains. The Chicago Mercantile Exchange’s (CME) increase in margin requirements, extended long positions, and sparse holiday trading that exacerbated intraday fluctuations were the main causes of the pullback, according to analysts.
As Russian President Vladimir Putin informed US President Donald Trump that Russia will reevaluate its stance in peace talks after “a Ukrainian drone attack on a Russian presidential residence,” the safe haven demand for the metals remains intact.
The silver rise is being supported by tighter supplies and liquidity that may swiftly dissipate. According to economists, silver lacks a reserve like gold since the London gold market is supported by over $700 billion in bullion that may be leased out in the case of a liquidity crunch.
“Renewed Russia-Ukraine hostilities and US-Venezuela tensions may create a desire for safe havens that may provide lower-level assistance. Gold’s resistance is between Rs 1,36,850 and Rs 1,38,670, while its support is between Rs 1,33,550 and Rs 1,31,710. Rahul Kalantri, vice president of commodities at Mehta Equities Ltd., said that silver has resistance between Rs 2,26,810 and Rs 2,28,970 and support between Rs 2,19,150 and Rs 2,17,780.
According to a recent analysis from Motilal Oswal Financial Services Ltd., the low supply of deliverable silver has been made public by ongoing inventory drawdowns in major global hubs, a deteriorating arbitrage between Shanghai and COMEX, and recurrent delivery pressures.
