Editor’s Note
After reaching record highs, gold and silver prices fell sharply on Friday, driven by news of a potential new Fed Chair and profit-taking. This sudden drop has caught many investors off guard.
After hitting record highs on Thursday, gold and silver prices witnessed a sharp decline on Friday. Prices fell by up to 6% in international markets and on the domestic MCX. News regarding the appointment of a new Fed Chairman in the US and profit booking have pushed prices lower. Investors are surprised by the heavy fall in gold and silver prices.
A sharp decline was observed in gold and silver prices on the Indian bullion market and MCX on Friday. The record-breaking rally that had been ongoing for several days suddenly came to a halt, with prices slipping significantly below their higher levels. While there was immense enthusiasm among investors on Thursday, heavy selling pressure was seen as soon as the market opened on Friday morning. A fall of nearly 6% in silver and about 5% in gold was recorded. This sudden decline has dealt a severe blow to investors who had recently bought at record highs.
In Friday morning’s session, the March futures for silver on MCX fell by up to 6% to a lower level of ₹3,75,900 per kilogram. It should be noted that just on Thursday, silver had touched its all-time high level of ₹4,20,048 per kg. Similarly, gold futures also saw a 4.8% decline, reaching a level of ₹1,75,100 per 10 grams. On Thursday, gold had touched a historic peak of ₹1,93,096 per 10 grams. Due to this major correction in prices, gold and silver ETFs also witnessed a significant fall of up to 14%.
The main reasons behind this major fall in precious metals are primarily the news coming from the United States. US President Donald Trump is set to announce the name of the new Federal Reserve Chairman today, Friday. There is strong market chatter that Trump could hand over the reins of the Fed to a ‘hawkish’ individual, who could work towards keeping interest rates high or strengthening the dollar. Specifically, the name of Kevin Warsh is at the forefront, whom the market views as a strict policy expert. If the dollar strengthens, it will have a direct impact on gold and silver, and this expectation of dollar strength has dimmed the shine of gold and silver.
On Thursday, gold touched a record level of $5,595 and silver $120 per ounce in the international market. After such a massive rally, profit booking in the market was considered inevitable. Investors began taking profits by closing their positions at high levels, leading to a heavy fall in prices. Additionally, the ‘safe haven’ demand that had increased due to tensions in Iran and other geopolitical reasons now appears to be stabilizing somewhat. In India too, a decline in gold demand has been observed due to record prices. According to a World Gold Council report, gold demand in India fell by 11% in 2025.
Despite the heavy fall, experts say that gold and silver prices are still at elevated levels. Since the beginning of January, gold has shown a gain of over 30% and silver over 61%. In India, retail demand has been impacted due to the wedding season and high prices, leading to an estimate that demand this year will remain around 700 tonnes. Currently, there is an atmosphere of uncertainty in the market, and experts are advising on this issue:
