Silver fell by more than 15% in a single day
On Friday, the precious metals market witnessed the biggest sell-off in more than a decade. Silver fell more than 15% in a single day, the biggest fall since 2011, while gold fell more than 7%. Worst day since 2013. Expectations of profit-booking, strengthening of the dollar and a tough stance regarding the new chair of the Fed shook the market. All this happened just a day after touching the record high.
On MCX, silver for March delivery fell by 17% to ₹ 3,32,002. Whereas MCX Gold Futures fell by 9% to ₹ 1,54,157. The situation was worse in ETFs. SBI Silver ETF fell 22.4%, ICICI Prudential Silver ETF fell 21% and Nippon India Silver ETF fell 19.5%. Gold ETFs also slipped—Nippon Gold ETF closed down 10% and ICICI Prudential Gold ETF closed down 9.5%. According to Kotak Securities, this fall in MCX Gold is the biggest since March 15, 2013, while this day for Silver was the worst since September 23, 2011.
Varsh effect on silver and gold
The major reason for the decline is being said to be US President Donald Trump’s nomination of Kevin Wersh as the next Fed Chair. Varsh is considered to be a tough hawk on inflation. Due to this the dollar strengthened and gold and silver came under pressure.
devastation in foreign markets also
In the international market, silver fell by more than 15% to $98.07 per ounce and broke the important level of $100. Gold also fell more than 7% to slip below $5,000, although it is still on strong gains for the month.
Why did silver fall more?
According to experts, silver has a high volatility and due to its link to industrial demand, sharp correction after a rise is common.
What next?
Analysts believe that after such a sharp fall, huge fluctuations may continue for some time. Most experts are considering this as a healthy correction after a long rally, and not the end of the rally. There is advice for investors. Manage risk, book profits and be prepared for further volatility.