MUMBAI, Feb 5, 2026, 15:46 IST
Silver futures on India’s Multi Commodity Exchange (MCX) plummeted 10% Thursday, with the March contract sliding Rs 26,850 to Rs 2,42,000 per kg. Gold April contracts dipped 1.51%, ending at Rs 1,50,736 per 10 grams. The Axis Silver ETF hit a low of Rs 216.86. MCX Clearing Corporation announced margin hikes starting Thursday: 4.5% for silver and 1% for gold, with further increases expected Friday.
This shift is significant since these products offer retail investors a quick way into bullion. ETFs, which trade like stocks and mirror the metal’s price, can reflect sharp futures moves in portfolio values almost instantly.
The margin hike acts as an automatic trigger. Margins are cash collateral required to hold a futures position open; increasing them pushes traders to add funds or trim their bets, which can escalate a selloff into a rush to exit.
Gold and silver remained under pressure worldwide as risk appetite faltered and the dollar strengthened. Spot gold dropped 0.9% to $4,917.61 an ounce, while silver plunged 9.3% to $79.88, after earlier tumbling as much as 15%, according to Reuters. Tim Waterer, chief trade analyst at KCM, said the Warsh nomination gave the dollar a “new lease of life.” Meanwhile, Kunal Shah from Nirmal Bang Commodities noted that industrial demand had “vanished” at these elevated silver prices. Reuters
Comex silver for March delivery dropped $8.85, or 10.48%, settling at $75.55 an ounce, according to the Times of India. The metal hit a low of $73.38 during the session. “The decline … appears set to continue after the recent rebound failed to hold,” Jigar Trivedi, senior research analyst at IndusInd Securities, said. The Times of India
The impact on fund prices was swift. According to The Economic Times, silver ETFs tumbled up to 21%, with several dipping 16–17% during the session, while gold ETFs dropped as much as 7%. Sandip Raichura, CEO of retail broking and distribution at PL Capital, told ETMutual Funds that gold should consistently make up about 10% of client portfolios. He added that given silver’s volatility, a SIP—a regular fixed investment—remains the cleaner way to build exposure over time.
Some brokers continue to back buying the dip, but with strict risk limits in place. Abhilash Koikkara, head of forex and commodities at Nuvama Professional Clients Group, has set a target of 1,75,000 for MCX gold, placing a stop-loss at 1,47,000. For silver, he’s aiming for 3,30,000, with a stop-loss fixed at 2,45,000. The stop-loss acts as a safety net to limit losses if the trade turns against you.
The next move could swing either way. Standard Chartered analysts flagged that price action is expected to “remain volatile until there is greater certainty on the monetary policy outlook,” though they maintain the structural case for bullion remains intact. Another margin hike Friday, combined with headline risks tied to diplomacy and interest rates, keeps the door open for downside: forced liquidations in thin markets. The Times of India
Gold tried to regain its footing after an early drop. According to LiveMint, MCX gold surged nearly 4% off the day’s low, making a push to bounce back. Kotak Securities’ Kaynat Chainwala noted prices “look likely to remain choppy” as markets brace for U.S. labor data and weaker commodity trends. mint
The backdrop remains harsh. Spot silver and gold dropped 32% and 13%, respectively, from Jan. 28 to Feb. 2, according to LiveMint. They bounced back over the next two sessions, only to see selling pressure return on Thursday. This cycle of steep declines, quick recoveries, and fresh sell-offs has made short-term trades risky.
For Indian traders, the margin hike on Friday has become a fixed date, not just a passing detail. The key now is if the dollar holds its ground and if U.S. rate forecasts calm enough to give bullion some room to maneuver.
