Major Relief for Buyers: Gold Falls ₹4,000 and Silver Drops ₹8,000 in a Day — What Triggered the Crash?

Gold and silver prices recorded a sharp fall on Tuesday, offering significant relief to consumers. Both metals saw a steep, single-day decline, with gold dropping by ₹4,000 and silver plunging by ₹8,000. The downward trend is largely attributed to fading expectations of a U.S. Federal Reserve interest rate cut next month.

In Delhi, 24-carat gold fell by ₹3,900, bringing its price down to ₹1,25,800 per 10 grams. The price of 22-carat gold also slipped by ₹3,900 to settle at ₹1,25,200. Silver witnessed an even bigger correction, dropping by ₹7,800 to reach ₹1,56,000 per kilogram, according to the All India Sarafa Association.

Investors are now closely tracking upcoming U.S. economic data and policy signals from the Federal Reserve, both of which will be released later this week. Market sentiment suggests that hopes of a rate cut in the near term have weakened considerably.

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Renisha Chainani, Head of Research at Augmont, said the absence of U.S. economic indicators for six weeks, combined with recent statements from Federal Reserve officials, has reduced the likelihood of a December rate cut. In the international market, spot gold extended its losing streak for the fourth straight session, sliding to $4,042.32 per ounce. The metal has now dropped 3.64% from its all-time high of $4,195.14 per ounce. Spot silver, however, rose 0.57% to $50.49 per ounce after three consecutive days of decline.

Praveen Singh, Head of Commodities at Mirae Asset Sharekhan, noted that doubts about an immediate rate cut continue to pressure gold. “Expectations for a December cut were around 63% on May 5, but have now fallen to 41%,” he said.

HDFC Securities Senior Analyst Soumil Gandhi added that the U.S. September employment report will be a key indicator for market direction. “The upcoming economic data will shape interest rate expectations and will likely influence gold prices in the short term,” he said.