Gold and silver prices in India are showing signs of retracement after scaling record highs recently. This correction in prices has sparked a debate among investors: Is this the right time to buy?

Current Market Scenario

After a period of gains, both gold and silver have experienced a notable downturn. MCX (Multi Commodity Exchange) gold opened today at ₹1,51,948 per 10 grams, a decrease of ₹1,098 or 0.71% compared to the previous close of ₹1,53,046. This weaker opening is attributed to pressure in global bullion markets and a firming US dollar, which has reduced the demand for safe-haven assets.

Silver prices have also seen a sharp decline. On Thursday, silver prices in India fell sharply, dropping 9% to ₹2,44,654 on the MCX. MCX Silver futures shed 5.7 per cent at ₹2,29,187 levels. Overall, silver prices have taken the worst hit, and tumbled up to 47.5 per cent in the last six trading sessions from its record high. Silver exchange-traded funds (ETFs) saw a dramatic 38 per cent drop, from their peak just seven days ago on January 29.

However, there are signs of recovery. MCX gold April futures surged more than 2% to ₹1,55374 per 10 grams, while MCX silver March futures climbed nearly 3% to ₹2,50300 per kg, supported by short covering and fresh hedging activity amid global uncertainty.

Factors Influencing Price Fluctuations

Several factors are contributing to the current volatility in gold and silver prices:

• Global Market Pressures: Weakness in global bullion markets is impacting domestic prices.
• US Dollar Strength: A strong US dollar typically reduces demand for precious metals.
• Hawkish Fed Expectations: Expectations of a more hawkish stance from the Federal Reserve can drive down gold and silver prices.
• CME Margin Hikes: Sharp increases in CME (Chicago Mercantile Exchange) margin hikes have forced leveraged unwinding, contributing to the price decline. The CME Group has increased margin on Gold futures from 8 per cent to 9 per cent, and in the case of Silver margin is hiked from 15 per cent to 18 per cent.
• Profit-Taking: After reaching record highs, some investors have engaged in profit-taking, leading to a correction in prices.

Expert Opinions and Investment Strategies

Experts suggest that the recent decline in silver prices may offer opportunities for those who missed earlier gains, provided they can handle continued market volatility. Technical signs suggest prices may stabilise soon. Silver now trades in the $71-$80 demand zone, with support near $64 matching the 100-day moving average.

Wealth managers strongly recommend a staggered buying approach over lump-sum investments. It is also advised to avoid chasing prices or reacting to day-to-day moves. For long-term investors, this phase is about patience and discipline rather than action.

Geojit in its daily commodity insights expects Gold prices to remain volatile, with the broader outlook still bullish.

Is It the Right Time to Buy?

The question of whether it is the right time to buy gold and silver depends on individual investment goals and risk tolerance. Given the volatility in the market, a staggered investment approach is generally recommended. Investors should focus on long-term fundamentals, such as geopolitical tensions, central bank policies, and the strength of the US dollar.

MCX Data

MCX Gold April futures were down 1 per cent at ₹1,48,000 per 10 grams levels in opening trade. Gold prices in India are now down 23.3 per cent from the record high of ₹1,93,096 touched on January 29, shows MCX data. MCX Silver futures shed 5.7 per cent at ₹2,29,187 levels.

Support Levels

According to a brokerage report, support for MCX Gold is seen at ₹1,47,200 - ₹1,42,700 range; and in case of MCX Silver support is seen in the ₹2,30,177 - ₹2,02,600 range.