Silver and gold futures experienced significant corrections on Friday, retreating from their recent record highs as investors engaged in widespread profit-taking amid a stronger US dollar and weak global market cues.

Silver Futures End Record Rally

Silver futures concluded their impressive five-day record-breaking streak with a notable decline on the Multi Commodity Exchange (MCX). The March delivery contract performance showed:

The white metal's retreat marked the end of a remarkable rally that had captured significant market attention throughout the week.

Gold Witnesses Profit-Taking Activity

Gold futures also faced selling pressure as traders booked profits on the domestic exchange. The February contract demonstrated similar weakness:

The yellow metal's decline reflected broader market sentiment as investors consolidated gains from recent strong performance.

Market Dynamics and Trading Disruptions

Commodities trading on the MCX experienced operational adjustments on Thursday, with morning session trading suspended due to civic elections in Maharashtra. Trading operations resumed during the evening session, allowing market participants to react to evolving global developments.

Expert Analysis on Market Volatility

Rahul Kalantri, Vice-President of Commodities at Mehta Equities Ltd, provided insights into the sharp volatility witnessed in precious metals markets. He highlighted that weaker-than-expected US weekly jobless claims strengthened the US dollar, while President Trump's softer stance on Iran reduced safe-haven demand for precious metals.

International Market Performance

Both metals experienced corrections during Asian trading hours in international markets:

Silver had previously reached a record USD 93.56 per ounce on Wednesday, while gold achieved an all-time high of USD 4,650.50 per ounce on January 14.

Federal Reserve Policy Expectations

Recent US macroeconomic data has influenced market expectations regarding Federal Reserve monetary policy. The data has kept expectations of rate cuts on hold for the first half of the year, pushing the dollar index to multi-week highs and creating near-term headwinds for bullion prices, according to market analysts.

Gold and Silver prices opened lower on Friday, January 16, extending their losses from earlier in the week as firmer-than-expected US economic data lifted the dollar and dampened hopes of near-term interest rate cuts by the Federal Reserve. The retreat follows both metals touching record highs earlier this week.

MCX Futures Performance

Indian commodity markets reflected the global weakness in precious metals. The following table shows the current MCX futures performance:

Silver futures experienced a more significant decline, retreating from their record high of ₹2,92,960 per kg reached in the previous session.

Global Market Dynamics

Spot gold dipped 0.30% to $4,601.53 per ounce by 0217 GMT, pulling back from Wednesday's record high of $4,642.72. US gold futures for February delivery also slipped 0.40%, trading at $4,605.20. Silver saw a steeper decline, falling 1.60% to $90.80 per ounce after touching an all-time high of $93.57 in the previous session.

Despite the pullback, gold remains on track for a weekly gain of nearly 2%, while silver is set to log a strong weekly gain of about 13%.

Economic Data Impact

The US Dollar Index (DXY) is hovering around 99.31, marginally down by 0.01 points. However, the dollar firmed up and is heading for a third straight weekly advance after the Labour Department reported weekly jobless claims dropped to 198,000, well below the consensus estimate of 215,000. This signals continued strength in the labor market and reduces expectations for aggressive Federal Reserve rate cuts.

Physical Gold Rates Across Indian Cities

Current physical gold prices across major Indian cities show regional variations:

Additional Market Developments

Several factors contributed to the current market sentiment. The safe-haven appeal of gold was tempered by easing geopolitical concerns, with Trump indicating that fatalities linked to Iran's protest crackdown appeared to be decreasing. Additionally, China's central bank announced targeted rate cuts on Thursday aimed at propping up economic momentum, while Poland's central bank revealed plans to raise its gold reserves to 700 tonnes.

Gold, which doesn't yield interest, tends to benefit when interest rates are low. However, with rate cuts now seen as less likely in the near term, the opportunity cost of holding gold rises, creating downward pressure on prices.