Gold costs Rs 5,000/10 grams, silver tanks Rs 8,700/kg. Two reasons for yellow metal’s sharpest intraday decline

Domestic gold prices fell by nearly Rs 5,000 per 10 gram on Friday to touch the day’s low of Rs 1,21,895, witnessing one of the sharpest intraday declines. Yellow metal prices took cues from international markets, where they fell by $127 per troy ounce.Silver rates fell sharper by Rs 8,700 per kg as white metal rates touched the day’s lowest Rs 1,53,729. On the COMEX, silver was hovering around $50.21, down 5.56%.

The sudden drop in gold and silver prices mainly had two causes. This is what happened:

1) Fed rates

Gold and silver prices fell today in the wake of hawkish comments from US Federal Reserve officials, clouding prospects for a rate cut in December. A Fed rate cut acts as a positive trigger for unyielding gold.

According to CME Group’s FedWatch tool, traders now see a 49% chance of a quarter-point rate cut in December, up from 64% earlier this week.

2) End of the US shutdown

The end of the US government’s record 43-day shutdown, which disrupted key economic data flows, undermined gold’s appeal. While the White House has dampened hopes for clarity on the economy, saying October unemployment data may not become available, the immediate impact could lead to further reductions in the price of gold and silver. Anuj Gupta, director of Ya Wealth Global Research, said the appeal of gold and silver has diminished due to these two developments. He sees the precious metal’s near-term weakness continuing. Both gold and silver are in top form in 2025 and appear to be the best asset class. Gupta said domestic gold prices have risen 60%, or Rs 45,700 per 10 grams, while silver prices have risen 78%, or Rs 67,700, this year.In November, gold prices rose 1%, or Rs 1,262, while silver rose 4.6%, or Rs 6,845 per kg.

Gold trading strategy

Gupta recommends a sell-on-rise strategy.

Sell ​​gold at Rs 1,27,000 with a stop loss of Rs 1,31,000 and a target of Rs 1,20,000

Sell ​​silver at Rs 1,63,000, with a stop loss of Rs 1,66,000 and a target of Rs 1,55,000.

(Disclaimer: The recommendations, suggestions, views and opinions expressed by the experts are their own. These do not represent the views of The Economic Times.)