Gold and silver prices moved lower on Tuesday, surprising investors who had been watching the recent rally in precious metals. The fall came at a time when global trading activity slowed, creating sharp swings in prices and adding to market uncertainty.
On February 17, at the time of writing, gold was down by Rs 2,561 or 1.65% at Rs 152,199. Silver slipped even more sharply, falling by Rs 6,241 or 2.6% to Rs 233,650.
THIN GLOBAL TRADING WEIGHS ON BULLION
A key reason behind the drop is reduced participation from major global markets. Chinese markets are closed from February 15 to February 23 for Lunar New Year celebrations, while United States markets were shut for the Presidents’ Day holiday.
With two of the world’s biggest trading centres inactive, liquidity in bullion markets fell. Lower volumes often make prices more volatile, and in this case, they pushed gold and silver lower.
Beyond holiday-driven trading, investors are also closely tracking interest rates, inflation and signals about global economic growth. Precious metals do not generate income, so their appeal often weakens when interest rates are high and other investments offer better returns.
EXPERTS SEE CONSOLIDATION, NOT A REVERSAL
Aksha Kamboj, Vice President, India Bullion and Jewellers Association (IBJA) and Executive Chairperson, Aspect Global Ventures, believes the recent easing is part of a normal pause.
“Gold is easing slightly in the current market but is still higher than last week’s levels. The overall trend is still supportive, showing continuous safe-haven demand despite the temporary profit-booking. The current easing seems to be a part of the consolidation process rather than a reversal. Gold may remain strong above key levels if global uncertainties continue,” he said.
Kamboj added, “Silver is continuing its correction trend in the current market after a strong rally in the previous weeks. The sharp correction is due to the higher volatility of silver prices and their sensitivity to changes in industrial sentiments. However, the prices are still higher than last week’s levels, showing that the overall trend is still intact.”
Ponmudi R, CEO of Enrich Money, says technical levels suggest that the broader trend is still constructive despite short-term weakness.
“MCX Gold futures are trading near the Rs1,50,000–Rs1,60,000 zone, consolidating after a sharp correction from all-time highs around Rs1,80,000–Rs1,81,000. Despite short-term consolidation, the broader uptrend structure remains supportive, with prices holding above important long-term support levels.”
Ponmudi R added, “MCX Silver futures are trading within the Rs2,30,000–Rs2,70,000 range after a sharp correction from record highs around Rs4,20,000. While the long-term bullish structure remains intact, the steep pullback has dragged prices below major moving averages, signaling short-term bearish pressure and an ongoing corrective phase.”
WHAT SHOULD INVESTORS DO NOW?
For investors, the current phase looks more like a correction than a long-term trend change. Analysts suggest avoiding panic selling during volatile sessions.
Long-term investors may consider staggered buying on dips, especially near key support levels mentioned by experts. However, short-term traders should remain cautious, as thin global liquidity can trigger sudden price swings.
Much will depend on the future path of interest rates. If expectations grow that the Federal Reserve System may cut rates in the coming months, gold and silver could regain strength. Until then, experts advise investors to keep allocations balanced and invest gradually rather than chasing sharp moves.
