English
English
English
Gold and silver prices witnessed a sharp correction after touching record highs, with MCX futures crashing heavily. Profit booking, a stronger US dollar, and budget-related caution triggered volatility, raising questions about whether gold can recover next week.
Precious Metals See Sharp Sell-Off
New Delhi: Gold and silver prices faced a steep sell-off as investors rushed to book profits following a historic rally. The correction came amid global market turbulence triggered by a stronger US dollar and growing caution ahead of India’s Union Budget 2026. Both domestic spot markets and futures contracts reflected intense volatility.
Silver saw the sharpest fall among precious metals. In the domestic physical market, prices plunged nearly 19 per cent, dropping by ₹72,500 to ₹3.12 lakh per kg (inclusive of taxes). This marked the second straight session of heavy losses after silver had surged to an all-time high of ₹4.04 lakh per kg earlier in the week.
Despite the sharp correction, silver still delivered strong monthly gains. In January, prices rose by over 30 per cent, highlighting that the broader trend remains positive even though short-term sentiment has weakened significantly.
Gold prices also came under pressure, falling more than 2 per cent to ₹1.65 lakh per 10 grams. This decline followed an even steeper fall in the previous session after gold had touched a record ₹1.83 lakh per 10 grams. On a monthly basis, however, gold gained over 20 per cent in January, reflecting sustained investor interest in safe-haven assets.
The impact was even more pronounced in the futures market. According to official MCX data, gold futures crashed nearly 12 per cent, closing ₹20,328 lower at ₹1,49,075 per 10 grams, compared to ₹1,69,403 per 10 grams in the previous session.
Global Shift Away from the U.S. Dollar
Silver futures witnessed an even steeper fall. MCX silver prices plunged 27 per cent, wiping out more than ₹1 lakh per kg in a single session. The contract settled at ₹2,91,922 per kg, sharply down from ₹3,99,893 per kg at the previous close. This highlights the scale of panic-driven selling in the commodity markets.
Market participants attribute the sharp correction to aggressive profit booking after a rapid rise, combined with global risk aversion and dollar strength. With prices at record highs, many investors chose to exit positions, triggering a cascade of selling across spot and futures markets.
According to the experts, the next trading session will be crucial. He noted that if Comex gold fails to reclaim the $4,900 per ounce level on Monday, February 2, 2026, it could signal that gold has already peaked.
Are central banks accumulating gold to shift away from the dollar driving gold prices higher?
Experts warned that after topping out, gold prices could gradually slide toward $3,800 per ounce by October 2026. He added that the decline may not be straight-line and could involve intermittent rebounds, often referred to as “dead-cat bounces,” before stabilising at lower levels.
