Gold, silver prices witness crash today: Here we decode why
What's the story
Gold and silver prices have witnessed a major crash today, with MCX gold April futures plunging to an intraday low of ₹1,38,634 per 10g. MCX silver March futures also took a hit, falling by ₹26,273 or 9% to ₹2,65,652 per kg. The sharp fall in gold and silver prices is due to profit booking after a strong rally last year.
Market dynamics
International gold prices see historic daily drop
The global market is witnessing massive profit booking in gold and silver. International gold prices are on track for their biggest daily drop since 1983, while silver is set for its worst day ever, Reuters reported.
Margin increase
CME Group raises margin requirements for gold, silver futures
The CME Group is raising margin requirements on Comex gold and silver futures to curb increased market volatility. For non-heightened risk positions, margins for gold futures will rise to 8% from 6% of the contract value. For heightened risk positions, margins will increase to 8.8% from 6.6%. Similarly, for silver futures, margins for non-heightened risk positions will rise to 15% from 11%, while those for heightened risk positions will go up to 16.5% from 12.1%.
Investment guidance
Experts advise against investing in gold and silver
Experts advise against investing in gold and silver at this time due to high volatility. Anuj Gupta, a SEBI-registered commodity expert said, "Gold and silver prices are not responsive to any levels. It is not the right time to buy gold and silver." Vandana Bharti, head of commodities research at SMC Global Securities, cautioned about the rapid price correction in commodity markets and advised long-term investors to wait for stability before making fresh investments.