New Delhi, Feb 2, 2026, 12:05 (IST)
- MCX gold and silver slid further, pressured by persistent volatility in metals
- Gold and silver ETFs jolted sharply following BSE’s move to tighten intraday trading bands
- Steelmakers highlighted the infrastructure boost in Budget 2026 as a key driver of demand
Silver futures on the Multi Commodity Exchange of India plunged to a 9% lower circuit, hitting the day’s down limit at ₹2,41,744 per kg on Monday—roughly 42% below last week’s peak of ₹4,20,048. Gold April futures also took a hit, dropping over 5% at one stage to ₹1,40,001 per 10 grams. Ponmudi R, CEO of Enrich Money, noted, “The ₹1,43,000 – ₹1,45,000 zone continues to act as a strong dynamic support.” (mint)
This whiplash hits hard because India ranks among the globe’s largest bullion markets. The shockwave is now hitting even those products touted as slow-moving hedges. When prices drop this sharply, leverage kicks in: traders face margin calls, dump positions amid the slump, and fuel further price swings.
On the BSE, gold and silver ETFs — funds tied to metals and traded like stocks — plunged as much as 20% early Monday before clawing back some losses. Axis Silver ETF and Edelweiss Silver ETF both hit their 20% lower circuit breakers, then rallied roughly 10% by mid-session. The BSE set these bands based on the previous day’s NAV, restricting trades within a ±20% range. (The Economic Times)
Margin adjustments are stirring up the market. A statement from the exchange late Friday revealed initial margin requirements for gold futures will climb to 8% from 6% for non-heightened risk accounts. Silver margins are set to jump to 15% from 11%. Accounts flagged as higher risk will face even steeper hikes. These changes, tied to CME Group, kick in after Monday’s close. Manoj Kumar Jain of Prithvi Finmart weighed in, saying, “Gold may defend the $4,440 level on closing basis.” (The Economic Times)
Outside India, spot gold dropped 3.6% to $4,686.51 an ounce, while silver took a sharper hit, sliding 6.7% to $78.96 in early trade. The selloff kicked off after Donald Trump nominated Kevin Warsh to head the Federal Reserve—traders saw that as a boost for the dollar. (Reuters)
MCX gold futures trimmed sharp losses on Sunday, closing at ₹1,48,104 per 10 grams, with silver finishing at ₹2,65,652 per kg, according to market data. Renisha Chainani from Augmont noted that the budget failed to offer targeted tax relief or cut import duties for the gems and jewellery sector. Kaynat Chainwala of Kotak Securities described gold as “the favourite hedge against uncertain times and geopolitical tensions.” (The Economic Times)
Retail 24-carat gold hovered around ₹1,69,300 per 10 grams in key metro cities. Bullion imports face a combined levy of 6% customs duty and 3% GST. (Hindustan Times)
Akshat Garg, head of research and product at Choice Wealth, cautioned investors against rushing to sell. “Gold and silver are portfolio hedges, not trading bets,” he emphasized. (mint)
The government is counting on infrastructure spending to drive growth in the upcoming fiscal year. Nirmala Sitharaman announced that public capital expenditure will increase to ₹12.2 lakh crore in 2026-27, up from ₹11.2 lakh crore allocated for 2025-26. She also set aside ₹10,000 crore over five years for a container manufacturing scheme. (The Economic Times)
Steel producers in Bokaro, Jharkhand, see a potential for steadier demand following the government’s push. Priya Ranjan, head of Bokaro Steel Plant under Steel Authority of India, described the container-manufacturing boost as “a welcome step.” Ravish Sharma from ESL Steel Limited, part of Vedanta, highlighted housing and infrastructure as key demand drivers. Meanwhile, Harsh Bansal of BMW Industries Limited emphasized the challenge of balancing growth with environmental responsibility. (The Times of India)
Investors sold off the exchange’s shares too. MCX stock dropped 4% to 2,145 rupees on BSE, marking a nearly 20% slide over three sessions. The metal selloff hit trading sentiment hard. (The Economic Times)
The next move could go either way. Additional margin hikes, a firmer dollar, or thin liquidity might spark more forced selling. On the flip side, if the greenback stalls or geopolitical tensions rise, safe-haven buying could pick up. Steel demand also depends heavily on project rollouts; slow tenders or postponed spending would dull the budget optimism.
Traders are keeping an eye on whether tighter bands and higher margins will ease the market or just shift the strain between products. The tape remains ugly, and the market still feels unsettled.
