New Delhi, Feb 2, 2026, 12:05 (IST)
- MCX gold and silver dropped again, weighed down by ongoing volatility in the metals market
- Gold and silver ETFs took a sharp hit after BSE tightened intraday trading bands
- Steelmakers pointed to the infrastructure push in Budget 2026 as a major demand catalyst
Silver futures on the Multi Commodity Exchange of India crashed to a 9% lower circuit, hitting the day’s down limit at ₹2,41,744 per kg on Monday—plunging about 42% from last week’s peak of ₹4,20,048. Gold April futures weren’t spared either, sliding more than 5% at one point to ₹1,40,001 per 10 grams. Ponmudi R, CEO of Enrich Money, said, “The ₹1,43,000 – ₹1,45,000 zone continues to act as a strong dynamic support.” mint
The impact cuts deep, considering India is one of the world’s biggest bullion markets. Even the so-called slow-moving hedges aren’t immune to this shockwave. Sharp price drops trigger leverage effects: traders get margin calls, offload positions during the downturn, and push prices into more volatile territory.
On the BSE, gold and silver ETFs — metal-linked funds traded like stocks — tumbled up to 20% early Monday before clawing back some ground. Both Axis Silver ETF and Edelweiss Silver ETF hit their 20% lower circuit breakers, then bounced back about 10% by mid-session. The BSE applies these bands based on the previous day’s NAV, capping trades within a ±20% range.
Margin tweaks are rattling the market. The exchange announced late Friday that initial margin requirements for gold futures will rise to 8% from 6% for standard accounts. Meanwhile, silver margins will climb to 15% from 11%. Accounts flagged as higher risk will see even sharper increases. These changes from CME Group take effect after Monday’s close. Manoj Kumar Jain of Prithvi Finmart commented, “Gold may defend the $4,440 level on closing basis.” The Economic Times
Spot gold outside India fell 3.6%, hitting $4,686.51 an ounce, while silver plunged 6.7% to $78.96 early on. The sharp decline followed Donald Trump’s nomination of Kevin Warsh to lead the Federal Reserve—a move traders interpreted as bullish for the dollar.
MCX gold futures pared earlier steep losses on Sunday, closing at ₹1,48,104 per 10 grams. Silver ended the day at ₹2,65,652 per kg, market data showed. Renisha Chainani from Augmont pointed out that the budget didn’t deliver targeted tax relief or reduce import duties for gems and jewellery. Kaynat Chainwala of Kotak Securities called gold “the favourite hedge against uncertain times and geopolitical tensions.” The Economic Times
Retail 24-carat gold prices stood near ₹1,69,300 per 10 grams across major metro cities. Bullion imports carry a total charge of 6% customs duty plus 3% GST.
Akshat Garg, who leads research and product at Choice Wealth, warned investors not to jump the gun on selling. “Gold and silver are portfolio hedges, not trading bets,” he stressed. mint
The government plans to boost growth through infrastructure investment in the next fiscal year. Nirmala Sitharaman revealed that public capital expenditure will rise to ₹12.2 lakh crore in 2026-27, up from ₹11.2 lakh crore allocated for 2025-26. Additionally, ₹10,000 crore has been earmarked over five years for a container manufacturing scheme.
Steel producers in Bokaro, Jharkhand, are optimistic about steadier demand, spurred by the government’s recent push. Priya Ranjan, who heads the Bokaro Steel Plant under the Steel Authority of India, called the boost to container manufacturing “a welcome step.” Ravish Sharma of ESL Steel Limited, part of Vedanta, pointed to housing and infrastructure as major demand drivers. Harsh Bansal from BMW Industries Limited, however, stressed the ongoing challenge of balancing growth with environmental concerns. The Times of India
MCX shares took a hit alongside the metal slump, falling 4% to 2,145 rupees on the BSE. That’s close to a 20% drop spread over just three sessions. The sharp fall in metals clearly rattled trading sentiment.
The next move is anyone’s guess. Further margin hikes, a stronger dollar, or sparse liquidity could trigger more forced selling. But if the greenback weakens or geopolitical risks flare, safe-haven demand might surge. Steel demand hinges on project rollouts too; delays in tenders or spending would weigh on budget optimism.
Traders are watching to see if tighter bands and increased margins will relieve pressure or simply move it around between products. The tape looks rough, and the market mood stays unsettled.
