Silver declines 5% to Rs 2.55 lakh/kg, gold drop to Rs 1.58 lakh/10g

New Delhi: Precious metals prices declined more than 5 per cent in the national capital on Friday, with silver declining to Rs 2.55 lakh per kilogram, while gold dropped to Rs 1.58 lakh per 10 grams amid subdued demand in the local market.

According to the All India Sarafa Association, the white metal slumped Rs 13,500, or 5.03 per cent, to Rs 2,55,000 per kilogram (inclusive of all taxes). It ended flat at Rs 2,68,500 per kg on Thursday.

Gold of 99.9 per cent purity also dived Rs 2,400, or 1.5 per cent, to Rs 1,58,500 per 10 grams (inclusive of all taxes) from the previous close of Rs 1,60,900 per 10 grams.

"Gold and silver fell sharply on Friday amid a broader market sell-off and remained under pressure on Friday, as investors adopted a cautious stance ahead of the highly anticipated US consumer inflation data," Saumil Gandhi, Senior Analyst, Commodities at HDFC Securities, said.

In the international market, spot silver gained USD 2.01, or 3 per cent, to USD 77.30 per ounce, while gold was trading nearly 1 per cent higher at USD 4,968.40 per ounce.

"Silver has rebounded to trade near USD 79 per ounce, while gold has also recovered to USD 4,990 per ounce as markets turn their focus to upcoming US Consumer Price Index (CPI) data," Kaynat Chainwala, AVP Commodity Research, Kotak Securities, said.

She added that softer inflation readings could revive expectations of policy easing and provide much-needed stability to bullion prices while persistent inflation and a resilient labour market could keep the Federal Reserve on a "higher-for-longer" trajectory, keeping prices under pressure.

Meanwhile, easing geopolitical tensions, particularly around Russia-Ukraine and renewed US-Iran nuclear discussions, have dampened safe-haven demand.

"On Thursday, silver faced additional pressure from weak US existing home sales and concerns over softer Chinese industrial demand ahead of the Lunar New Year shutdown," Chainwala said.