Why Are Gold Prices Dropping and Silver Plummeting?
Synopsis
On February 5, gold prices dipped moderately after a recent surge, while silver experienced a significant fall of over 8%. This article explores the market dynamics behind these fluctuations and the implications for investors amid ongoing geopolitical tensions and economic uncertainties.
Key Takeaways
Gold prices fell by 0.98% to Rs 1,51,552 per 10 grams.
Silver prices plummeted by 8.39% to Rs 2,46,283 per kg.
Support for gold is between Rs 1,45,000 and Rs 1,48,000.
Resistance levels for gold are between Rs 1,65,000 and Rs 1,75,000.
Silver's support is at Rs 2,35,000 to Rs 2,50,000, with resistance at Rs 3,00,000 to Rs 3,25,000.
Mumbai, Feb 5 (NationPress) The price of gold experienced a slight decline on Thursday following two consecutive days of increases, whereas silver saw a dramatic drop exceeding 8 percent.
As of around 10:25 AM, MCX gold February futures decreased by 0.98 percent, settling at Rs 1,51,552 per 10 grams on an intraday basis. In contrast, MCX silver March futures fell sharply by 8.39 percent to Rs 2,46,283 per kg.
Earlier in the morning, both gold and silver prices surged by approximately 6 percent but could not maintain those highs.
Market analysts noted that the decline in gold and silver prices at the week's onset was mitigated as traders absorbed the news of Kevin Warsh's nomination as the new Fed Chairman.
Despite ongoing diplomatic discussions between the US and Iran, safe-haven buying persists due to heightened tensions after US forces intercepted an Iranian drone. Talks between Iran and the US are set for Friday. The support for the rally on Wednesday also stemmed from a partial US government shutdown and profit-taking in the dollar index from its peak.
The overall upward trend for COMEX Gold remains strong, with recent pullbacks reflecting profit booking and healthy price adjustments. Current prices hover below significant moving averages, suggesting short-term downward pressure and a corrective phase rather than a complete reversal of the overall trend, according to market observers.
Strong support is noted in the Rs 1,45,000 to Rs 1,48,000 range for MCX gold futures, with resistance identified between Rs 1,65,000 and Rs 1,75,000.
The medium to long-term outlook for silver remains positive, driven by consistent industrial demand and structural supply challenges, despite high volatility.
Experts have indicated a support range for silver at Rs 2,35,000 to Rs 2,50,000, while resistance is expected between Rs 3,00,000 and Rs 3,25,000.
Ongoing structural supply deficits alongside steady industrial demand continue to bolster the bullish sentiment for silver. Persistent safe-haven demand, consistent accumulation by central banks, and expectations of accommodating global monetary policies are supporting prices for the yellow metal, according to a recent report.
Point of View
It is crucial to highlight the current volatility in the gold and silver markets, reflecting broader economic concerns. Investors must remain vigilant and informed about these fluctuations, as they may signal larger trends in the financial landscape.
NationPress
9 May 2026
Frequently Asked Questions
What caused the drop in gold and silver prices?
The drop in gold and silver prices is attributed to profit booking after a recent surge and the market's absorption of geopolitical events and central bank developments.
What are the current support and resistance levels for gold?
Support for MCX gold futures is observed in the Rs 1,45,000 to Rs 1,48,000 range, while resistance is around Rs 1,65,000 to Rs 1,75,000.
How does geopolitical tension affect precious metal prices?
Geopolitical tensions often drive safe-haven buying, which can increase demand for precious metals like gold and silver during uncertain times.
What is the outlook for silver prices?
The medium- to long-term outlook for silver remains positive due to consistent industrial demand and supply constraints, despite current volatility.
Why is gold considered a safe-haven asset?
Gold is viewed as a safe-haven asset because it tends to retain value during economic downturns and periods of market uncertainty.
