Silver, gold prices soar up to 9% after 3-day losing run on firm global cues, weak US dollar

Silver prices on Tuesday, February 3 increased by 9.23% (₹24,000) to ₹2,84,000 per kg in Delhi, ending the three-day losing streak amid firm global cues and a weaker dollar. The white metal closed at ₹2,60,000 per kg on Monday. 

Meanwhile, gold prices (24K, 99.9% purity) closed 3.3% up at ₹1,57,700 per 10 gram on Tuesday after closing at ₹1,52,700 per 10 gram in the previous session. 

Over the last three sessions, silver prices declined by 36%, falling by as much as ₹1,44,500 per kg from its all-time high of ₹4,04,500 per kg hit on January 29. Similarly, gold fell by 17% (₹30,300) from its record high of ₹1,83,000 per 10 gram on last Thursday, as investors rushed to book profits.  

"Gold recouped part of its recent losses on Tuesday after a sharp unwinding of a record-setting rally that had pushed prices down to a four-week low. Silver also moved higher, supported by bargain hunting following two days of sharp sell-offs," a PTI report quoted a commodity analyst as saying. 

Investors who were waiting for a correction to finally enter the market viewed the recent fall as a buying opportunity, leading to a rise in prices on Tuesday as buying interest rose again. 

Gold, silver futures

Silver futures for the March expiry jumped by 17.6% on Tuesday to an intraday high of ₹2,78,000 per kg on the Multi Commodity Exchange (MCX).

Gold futures for the April delivery soared by 6.8% to an intraday high of ₹1,53,806 per 10 gram on the MCX, rising from Monday’s closing price of ₹1,43,991 per 10 gram. 

On January 29, silver and gold futures hit lifetime highs of ₹4,20,048 per kg and ₹1,83,962 per 10 gram, respectively. Currently, silver futures are down 53% from the record high, while gold futures are trading 17% lower than Thursday's historic high. 

International markets

The precious metals rebounded in the overseas markets as well. Spot silver prices gained $9.55, or 12.07%, to $88.77 per ounce, while gold climbed to $275.39, or 5.91%, to $4,935.49 per ounce.

"Both metals have staged a sharp rebound, with spot gold and silver rising roughly 5% and 8%, respectively, after suffering steep declines of more than 15% and 3% over the past two sessions," the PTI report quoted Kaynat Chainwala, AVP Commodity Research, Kotak Securities, as saying. 

The selloff was exacerbated by higher margin requirements and growing expectations that policy easing will be delayed until Jerome Powell's term ends in May, with a perceived hawkish candidate set to take the helm, she added.

Gold and silver are expected to remain volatile, as per reports, amid the upcoming US data releases.