Mumbai, Feb 2, 2026, 15:30 IST
- After a steep drop from record levels, 24-carat gold in Mumbai and Delhi hovered near ₹1.61 lakh per 10 grams
- Spot gold dropped up to 7.5%, while silver plunged as much as 14% during Asian trading, Reuters reported
- Late last week, physical premiums in some parts of Asia surged to multi-year highs as buyers scrambled for metal close to peak prices
Gold and silver prices in India remained under pressure Monday following a sharp two-day drop. The 24-carat gold rate stood at ₹1,60,710 per 10 grams in Mumbai and ₹1,60,850 in Delhi, according to the Hindustan Times. Hindustantimes
This reversal is significant since bullion turned into a crowded trade following a sharp rally in January. Now, the pullback is spilling over into other asset classes. Analysts warn that margin calls — requests for additional collateral — risk turning a metals slump into broader forced selling.
In India, the shock hits both the retail sector and the jewellery trade just as policy and tax cues from the Union Budget start influencing purchasing choices. This follows a sharp rise in physical market “premiums”—extra fees above benchmark rates—as buyers scrambled to secure metal.
During Asian trading, spot gold plunged up to 7.5%, hitting $4,499.34 an ounce. Silver dropped even harder, sliding as much as 14.2% to $72.63, Reuters reported. The sharp declines also dragged down equities and cryptocurrencies. Reuters
“It’s risk off and de-leveraging,” Christopher Forbes, head of Asia and the Middle East at CMC Markets, said. Mark Matthews, head of research for Asia at Bank Julius Baer, described the selloff as having “snowballed” after profit-taking kicked in following a “parabolic” price surge.
On Budget day, 24-carat gold on India’s Multi Commodity Exchange (MCX) dropped sharply, falling to ₹1,36,185 per 10 grams from an opening price of ₹1,46,800, according to Hindustan Times. Meanwhile, March silver touched its “lower circuit” limit, closing at ₹2,65,652 per kg.
The crash came after a late-week rush for physical metal, with Indian dealers slapping on premiums as steep as $121 an ounce above official domestic prices — levels not seen since May 2014. On Jan. 29, local prices surged to a record 180,779 rupees per 10 grams, Reuters reported. “Anticipating a duty hike in the budget, investors were paying a premium,” said Ashok Jain, owner of Mumbai wholesaler Chenaji Narsinghji, in that report. Reuters
In China, premiums climbed to $32 an ounce amid a surge in Lunar New Year demand, Reuters reported, with some sellers cashing in on the jump. “Small investors still want to buy,” Peter Fung, head of dealing at Wing Fung Precious Metals, told Reuters.
India’s Economic Survey 2025-26 pointed to U.S. tariff moves, policy uncertainty, and a weaker dollar as key drivers behind last year’s gold rally, according to Economic Times. The report warned that precious metal prices could keep climbing unless “a lasting peace is achieved and trade wars are resolved.” It also valued India’s gold reserves at $117.5 billion as of Jan. 16. Indiatimes
The survey’s warning has already echoed in bullion-related products. According to Economic Times, some gold exchange-traded funds — ETFs that trade like stocks and track the metal — dropped by at least 10% during the late-January slump.
But what comes next remains uncertain. Matthews warned prices “could fall from here” if forced selling continues, while Gregor Gregersen, founder of Silver Bullion, pointed to tight physical supply and climbing premiums on retail silver — factors that might lure buyers back swiftly once the panic fades.
India’s retail rates remain comfortably beneath last week’s highs for now, with traders on the lookout for any indication that selling momentum has eased. The bigger question is whether this metals shock will stay contained or continue to drag stocks and crypto down via leverage and margin calls.
