Gold and silver prices saw a significant drop as investors took profits following a year of remarkable gains. MCX gold February futures fell by 7.12% to Rs 1,39,000 per 10 grams, while MCX silver March futures dipped 9% to Rs 2,65,652 per kg. CME Group increased margin requirements on Comex gold and silver futures due to substantial price declines, prompting investor vigilance.
The strengthening of the US dollar and expectations of a customs duty reduction in Budget 2026 by domestic investors contributed to the decline in precious metal prices. International markets witnessed spot gold prices on track for their most substantial daily decline since 1983, with silver also facing its worst day on record. CME Group announced margin adjustments for gold futures, necessitating traders to commit more capital upfront to maintain their futures positions, thereby reducing speculative activities.
Analysts observed a sharp rejection in MCX Gold futures from the Rs 1,80,000–Rs 1,81,000 range, followed by a significant breakdown indicating short-term trend exhaustion. Despite this, the broader long-term trend for gold remains bullish. The breakdown in MCX silver negated the bullish channel, signaling panic unwinding of leveraged long positions. Momentum indicators swiftly shifted from extreme overbought to oversold, reflecting structural instability rather than a healthy correction.
In the short term, the trend for silver remains bearish biased, with anticipated volatility remaining high. Analysts highlighted a critical support zone for silver at Rs 2,60,000-Rs 2,55,000, with an expected pullback towards Rs 3,00,000-Rs 3,10,000 likely to attract selling pressure.
