Gold Plummets Amid Dollar Surge: Silver Drops in Delhi as Global Markets Face Liquidity Squeeze
Precious Metal Prices Slip as US Dollar Gains Strength
Gold prices declined significantly on Wednesday in the national capital, reflecting downward momentum across precious metals. The market saw a drop of Rs 1,200, bringing the price of 99.9 per cent pure gold to Rs 1,48,100 per 10 grams, down from Tuesday's closing rate of Rs 1,49,300.Meanwhile, silver continued its descent for the second consecutive day, falling by Rs 4,000. The metal settled at Rs 2,31,000 per kilogram (inclusive of all taxes), following a previous session where it had plummeted by Rs 10,500 to settle at Rs 2,35,000 per kg.
Global Gold and Silver Decline amid Dollar Strength
The decline in India mirrors global trends as the US dollar gained considerable strength. In overseas markets, spot gold slipped by $52.01 or 1.3 per cent, trading at $4,058.10 per ounce. Silver also fell nearly 2 per cent, hitting $60.48 per ounce.Analysts note that these losses have pushed white metal prices back to levels last seen in early April. Traders are increasingly favoring dollar-denominated assets amid the volatile financial climate.
Analyst View: Dollar Rally and Monetary Policy Pressure Metals
The extended slide in gold prices is directly attributed by experts to a powerful rally in the US dollar. Growing expectations of tighter monetary policy continue to exert continuous pressure on precious metals, stated Saumil Gandhi, Senior Analyst at HDFC Securities.Praveen Singh, Head of Commodities at Mirae Asset ShareKhan, added that gold was trading around $4,050 per ounce as the dollar index strengthens and pushes towards breaching the 101 level, a high not seen since May 2025. This trend is supported by statements like that of ECB President Christine Lagarde downplaying the need for aggressive action after the June rate hike.
Liquidity Crisis Drives Sell-Off in Precious Metals
Market experts suggest that the recent decline in precious metals reflects a broader liquidity driven adjustment across global financial markets. Jateen Trivedi, VP Research Analyst at LKP Securities, noted the weakness is being fueled by a general liquidity event. This has been triggered by sharp profit booking and sell-offs witnessed recently in global AI and technology stocks.As investors confront losses in equities, many are reportedly liquidating gold holdings to meet margin requirements and reduce leverage. Trivedi emphasized that money is actively flowing into the US dollar, adding significant downward pressure on bullion prices. Market participants now anticipate continued pressure until there are signs of a softer dollar or renewed investment demand for precious metals.
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