Gold price today: Gold rate crashed 6% to hit its lower circuit on the MCX on Sunday morning, February 1, while MCX silver also plunged 6% as investors booked profits after a strong rally over the past year.
MCX gold April futures crashed by ₹40,757, or 22.2%, to an intraday low of ₹1,43,205 per 10 grams. MCX silver March futures plunged by ₹125483, or 31.4%, to ₹2,74,410 per kg.
Gold and silver prices are experiencing massive profit booking globally. According to Reuters, international gold prices were headed for their steepest daily fall since 1983 and silver was poised for its worst day on record.
There are three major factors behind the sharp decline in gold and silver prices: the CME margin hike, the dollar’s strong rise, and expectations of a customs duty cut in Budget 2026.
CME Group is raising margin requirements on Comex gold and silver futures to curb heightened market volatility.
According to an exchange statement, margin requirements for gold futures will be raised across risk categories. For non-heightened risk positions, margins will increase to 8% of the contract value from 6%. For heightened risk positions, margins will rise to 8.8% from 6.6%.
For silver futures, margins for non-heightened risk positions will be increased to 15% from 11%, while margins for heightened risk positions will go up to 16.5% from 12.1%.
A hike in margin requirements is negative for gold and silver prices as trading becomes more expensive. Higher margins mean traders must put up more money upfront to hold the same futures position. This also reduces speculative interests.
Buzz around an import duty cut to boost demand in the jewellery market is also exerting pressure on gold and silver prices.
“We may see further downside in gold and silver prices in the domestic market, as speculation suggests the central government may announce an import duty cut to boost demand in the jewellery market, which has been hit hard by soaring gold and silver prices,” said Anuj Gupta, a SEBI-registered commodity expert.
“Some delegations of the gems and jewellery industry have also demanded a reduction in import duties on gold and silver. So, any such announcement in the Union Budget 2026 may lead to more downside movement in the precious metals,” said Gupta.
The dollar index jumped almost 1%, making greenback-backed bullion expensive for overseas buyers.
Is it the right time to buy?
Experts say it is time to stay away due to strong volatility.
“Gold and silver prices are not responsive to any levels. It is not the right time to buy gold and silver. Investors should stay on the sidelines,” said Gupta.
While gold and silver remain important asset classes, and their long-term growth outlook remains strong, experts expect a healthy price correction and advise long-term investors to wait for the current volatility in commodity markets to subside before taking fresh positions.
“The sheer velocity of this ‘rocket rally’ warrants caution for the immediate term. We are already seeing the friction points of such a rapid ascent, including hiked margins and disruptions in the physical coin market, which could gradually dry up trading volumes,” said Vandana Bharti, the head of commodities research at SMC Global Securities.
Track: Gold, silver rates today
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Disclaimer: This story is for educational purposes only. The views and recommendations expressed are those of individual analysts or broking firms, not Mint. We advise investors to consult with certified experts before making any investment decisions, as market conditions can change rapidly and circumstances may vary.
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