Gold, silver trade shows signs of recovery

Sharp fall in rates revives sentiment in a market battered by unprecedented surge Kolhapur: After reeling under an extraordinary surge in global bullion prices, India’s gold and silver jewellery industry has begun to show early signs of relief, as a sharp correction in prices over the past two days has lifted sentiment in the domestic bullion market. The earlier rally had pushed the sector into what traders described as a severe economic crisis, wiping out business worth several lakh crore...

min read

Gold, silver trade shows signs of recovery

Sharp fall in rates revives sentiment in a market battered by unprecedented surge Kolhapur: After reeling under an extraordinary surge in global bullion prices, India’s gold and silver jewellery industry has begun to show early signs of relief, as a sharp correction in prices over the past two days has lifted sentiment in the domestic bullion market. The earlier rally had pushed the sector into what traders described as a severe economic crisis, wiping out business worth several lakh crore rupees and putting nearly two crore jobs under stress. With prices now cooling, manufacturers, traders and consumers are cautiously returning to the market. Three-month spiral The crisis began around the Diwali season and intensified over the next three months. Gold, which was available at around Rs 1 lakh per 10 grams, surged to an unprecedented Rs 1.82 lakh. Silver’s rise was even sharper: from nearly Rs 1.10 lakh per kg to close to Rs 4.20 lakh, a near fourfold increase. The spike paralysed India’s jewellery manufacturing sector. Production units shut down in large numbers, and lakhs of artisans were pushed into unemployment. Across the country, thousands of traders reportedly faced insolvency, with refund and settlement disputes running into thousands of crores. The impact was particularly visible in bullion trading hubs linked to MCX derivatives. Several trading firms reportedly collapsed. In Rajkot alone, over 45 traders are said to have declared insolvency. In Indore, news of a firm incurring losses of around Rs 1,500 crore sent shockwaves through the Madhya Pradesh bullion market. Manufacturing clusters in Rajasthan, Gujarat, Madhya Pradesh, Maharashtra, Karnataka and Tamil Nadu — key jewellery production centres — saw prolonged disruption. The tide turned as aggressive gold buying by major powers began to ease. Russia, seeking to stabilise its fiscal position, is learnt to have released significant quantities of gold into the market, contributing to a global price correction. The shift has brought visible relief in the Indian market. While fluctuations in bullion prices are not unusual, traders say this year’s surge resembled an “unnatural tsunami”. Geopolitical instability, a strong US dollar and rupee depreciation were major drivers. At the same time, large-scale gold buying by countries such as China and Russia — seen as an attempt to reduce dependence on the dollar — added to the rally. Social media speculation about further price spikes fuelled retail frenzy. Many investors entered bullion derivatives markets, while some consumers reportedly broke bank deposits to buy gold at elevated prices. The result was severe stress across the trade. Scale of the sector India imports about 700 tonnes of gold annually and recycles another 250 tonnes. Silver imports are estimated at $9–9.5 billion a year. A significant portion of trading takes place on commodity exchanges such as MCX through futures and options. The Centre had projected higher revenue from transaction-related taxes in the Union Budget, but the volatility underlined how sensitive financial and commodity markets have become to policy and global signals, traders said. With prices stabilising, manufacturing units that had cut their workforce by as much as 90% and sent workers back to their native places have begun calling them back. Factories that had shut solely due to high input costs are reopening, and trading activity is gradually resuming in major markets. Industry voice Bharat Oswal, President, Kolhapur District Bullion Association; Member, Gold Council, says, “This year’s shock to the gold and silver market was severe. Producers, traders and consumers — all have suffered. The episode is a reminder against chasing excessive profit and taking uncalculated risks. Both traders and buyers must remain cautious, as bullion markets are extremely sensitive to global developments.”

India bears the brunt: Nifty crashes 1,100, Sensex nosedives 3,900 points after US trade shock

Correspondent
Apr 7, 2025
2 min read

India woke up to a financial jolt this morning as its equity markets suffered their steepest fall in nearly a year, shaken by the ripple effects of US President Donald Trump’s aggressive new tariff regime. The Sensex plunged over 3,900 points at opening bell, while the Nifty tumbled more than 1,100 points, dragging Indian stocks to a 10-month low.

This sharp decline follows a global equity rout triggered by Trump's protectionist measures, which have sent panic waves across Asia and raised the spectre of a global recession. Investors dumped shares in a massive sell-off, with Indian benchmarks reacting sharply in early trade. The Sensex dropped to 71,425.01 — down 3,939.68 points — while Nifty slipped to 21,743.65, marking a 3.5% slide from the last session.

Adding to the pressure, the Indian rupee depreciated 30 paise to open at 85.74 against the US dollar.

India Among the Hardest Hit

Trump’s latest tariff hike — framed as a push to restore fairness to global trade — has imposed country-specific duties that go as high as 50%. India has been slapped with a 26% tariff, while a 10% baseline duty applies to all nations. This has set alarm bells ringing among Indian exporters and traders already struggling with global demand volatility.

President Trump, unfazed by the financial carnage, likened the move to a bitter but necessary cure. “Sometimes you need the medicine to fix something,” he told reporters earlier today.

Analysts Urge Economic Safeguards

Market experts believe that India's current market turmoil isn't rooted in domestic issues but is rather a consequence of being tightly woven into global investment flows.

“India will face the heat, not due to domestic reasons, but as an interlinked chain in the global portfolio flows,” said Ajay Bagga, a noted market expert. “India will need a fiscal, monetary, and reform package to protect the domestic economy from this global economic winter that is threatening to settle in.”

Sunil Gurjar, SEBI-registered research analyst, warned that the Nifty50 index has breached its first support level and is approaching the next. "A further breakdown could worsen the trend and accelerate the fall," he cautioned.

Asian Markets Bleed

The tremors from Trump's announcement were first felt in Asia, with key markets suffering steep losses. China's stock markets fell over 4% amid retaliatory tariffs of 34% against the US. Hong Kong's Hang Seng nosedived more than 10%, while Japan’s Nikkei index fell 6.5% after plunging 8% earlier in the day. Taiwan saw a near-10% collapse, and Singapore dropped over 8%.

Wall Street Braces for Impact

US markets, though yet to open, appear set for a rough start. Futures contracts on the New York Stock Exchange are sharply down, suggesting heavy losses once trading resumes.

Market sentiment globally has turned bearish, with fears of a looming recession taking hold. Stephen Innes of SPI Asset Management described the scene as “free-fall mode,” noting, “Trump’s team isn’t blinking. The tariffs are being treated as a victory lap, not a bargaining chip.”