By Admin 
Silver Price Crash: The sudden sharp fall in the price of silver has created a stir in the bullion market. Silver, which gave 170 percent return to investors last year, made a shocking reversal on MCX. On Friday, the price of silver fell by 27 percent or Rs 1,07,968 in a single day. This is the second biggest fall in the price of silver so far. Due to this sudden huge decline in the price of silver, it has now gone far below the level of Rs 3 lakh.
Silver crashed from record high level
Interestingly, this silver bubble burst when its price had reached a record high of Rs 4 lakh just a day before the fall. On Friday, March expiry silver fell by Rs 1,07,968 or 27 per cent and closed at Rs 2,91,925 per kg on Multi Commodity Exchange (MCX). In the international market, spot silver fell by 28 percent to $ 85 per troy ounce. What happened that suddenly the price of silver fell so drastically?
strong US dollar
US President Donald Trump has elected Kevin Warsh as the new Chairman of the US Federal Reserve. With the entry of Trump’s favorite Warsh in the US Fed, the US dollar index climbed above the 97 mark. Generally, the strengthening of the dollar is negative for the prices of both gold and silver because their prices are fixed in US dollars worldwide. Due to strengthening of dollar, they become expensive for foreign buyers and their demand reduces. Higher interest rates reduce the appeal of non-interest yielding assets like silver.
pressure of rising gold price
Silver prices often follow the trend of gold. Gold prices had reached record levels at the beginning of the week. Due to global uncertainty, spot gold had reached close to $ 5600 an ounce. However, due to the fall in prices on Friday, it fell 4.7 percent to $ 5,143.40 an ounce. On MCX, February gold futures fell by 12 percent or Rs 20,514 and closed at Rs 1,50,440 per 10 grams.
Citi Research said that Kevin Warsh’s nomination supports that the Federal Reserve will remain independent. The bank called it a medium-term bearish factor for gold. This attitude also affected Silver’s emotions.
In fact, Warsh is being seen as a person who, despite agreeing with the policies of the Trump administration, also emphasizes on institutional independence. In such a situation, without being under political pressure, he can change his stance on the basis of data.
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