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Price of gold and silver.

Gold and silver prices are making new records. But a big decline was recorded on Friday. Silver registered a huge fall of Rs 85000 per kg in 24 hours. After touching the price of Rs 4.20 lakh per kg on Thursday, March futures silver on MCX fell to Rs 3.35 lakh at 3.30 pm on Friday.

At the same time, the price of gold also fell significantly on Friday. After reaching the price of Rs 193,096 per 10 grams, gold fell by Rs 25,500 and reached Rs 1,67,406. The sudden crash spooked investors, while jewelers and small buyers heaved a sigh of relief.

Heavy profit booking amid rise in dollar

On Friday, due to heavy profit booking by investors amid weak global trends and rising dollar, gold prices fell by Rs 14,000 per 10 grams and silver prices by Rs 20,000 per kg in the bullion market of the national capital. According to market sources, gold of 99.9 per cent purity fell by Rs 14,000, or 7.65 per cent, to Rs 1,69,000 per 10 grams (including all taxes). On Thursday, the price of gold increased by Rs 12,000 to reach an all-time high of Rs 1,83,000 per 10 grams.

Silver prices fell by Rs 20,000, or about five per cent, to Rs 3,84,500 per kg (including all taxes). In the last trading session, the price of silver had increased by Rs 19,500 to reach a record level of Rs 4,04,500 per kg.

Heavy fall in gold and silver

Saumil Gandhi, Senior Analyst – Commodities, HDFC Securities, said that gold and silver witnessed a sharp decline on Friday as investors started booking profits at a rapid pace after the recent record-breaking rally. He said the decline was mainly due to heavy selling of long positions by large institutional traders, who tried to book profits after several sessions of strong gains.

Pressure on bullion due to improvement in dollar

He said that the improvement in the dollar put further pressure on bullion. From a technical perspective, both gold and silver were overbought over the past several sessions, increasing the risk of a technical correction. Gandhi said the combined impact of tightening technical conditions, institutional profit-booking and dollar recovery, which is likely to continue, is putting pressure on bullion in the near term.

In the international market, spot gold was trading 5.31 percent lower, or $285.30, at $5,087.73 an ounce. During the day, gold fell by $ 425.86 or 7.92 percent to $ 4,945.26 an ounce. On Thursday, gold closed at $5,371.12 an ounce after reaching a new record of $5,595.02.

Spot silver also fell by $14 or 12.09 percent to $101.47 an ounce, while in foreign trade it fell by 17.5 percent to $95.26 an ounce in the day's trade. On Thursday, it reached a new peak of $ 121.45 an ounce.

Some profit booking globally

Vijay Kuppa, Chief Executive Officer, Incred Money, said that due to some reasons there has been a sharp decline in the prices of gold and silver. After the rise in the prices of both bullion, some profit booking seems to be taking place globally. He said that due to this increase no support price was set at a higher level, hence the technical correction or decline has been sharp.

He said uncertainty remained after President Donald Trump nominated Kevin Wersh to be the next head of America's central bank, the Federal Reserve, leading to a slight risk-off as markets fear the new leadership could be more hawkish.