Gold and silver prices remained under pressure on Sunday afternoon following the Union Budget presentation, with traders attributing the decline primarily to global macro factors rather than Budget announcements, as both metals recovered partially from morning lows after hitting lower circuits.
MCX gold futures traded 5 per cent lower after a modest intraday recovery, having slid 9 per cent earlier in the session. MCX silver held declines as traders approached the budget cautiously, wary of potential changes to import duties on precious metals, according to market observers.
“Selling pressure intensified on the MCX today, with both metals hitting lower circuits, sliding 9 per cent earlier amid a brutal session, compounding Friday’s steep losses of 17 per cent in gold and 27 per cent in silver. Currently, gold trades 5 per cent lower after a modest intraday recovery, while silver holds declines as traders now approach the Union Budget cautiously, wary of potential changes to import duties on precious metals,” said Kaynat Chainwala, AVP – Commodity Research, Kotak Securities.
The selloff followed Friday’s crash when gold and silver suffered their steepest single-day fall since 1980, settling at $4,864 per ounce and $84.66 per ounce respectively. “The sell-off was triggered by a sharp rebound in the U.S. dollar, broad-based global market weakness, and the Trump administration’s nomination of Kevin Warsh, widely regarded as an inflation hawk, as the next Federal Reserve chair,” Chainwala added.
Market participants noted the correction came after an unprecedented rally. “Data shows that until 29th January, silver had surged 319 per cent year-on-year in rupee terms, while gold had risen 118 per cent. Even after a correction of around 11 per cent in silver and 4.3 per cent in gold on 30th January, silver remains up 268 per cent YoY and gold 108 per cent YoY,” said Sriram B K R, Senior Investment Strategist, Geojit Financial Services.
Domestic gold had retreated from highs near ₹1,80,000 per 10 grams to stabilize around ₹1,49,500-₹1,49,653, while silver corrected from peaks near ₹4,20,048 per kg to around ₹2,91,925-₹2,91,000.
“The ETF prices have turned volatile on the downside, also on the back of expectation around changes in customs duty on Gold & Silver, in the Union Budget,” Sriram added.
Analysts maintained that the decline was driven by global factors rather than Budget-related concerns. “Today’s sharp fall in gold and silver ETFs looks scary on the screen, but it’s more of a sentiment shock than a story-breaker. Precious metals had run up sharply over the last year, and what we’re seeing now is a mix of profit-booking, global volatility and reaction to macro cues,” said Akshat Garg, Head Research & Product, Choice Wealth.
Further pressure may emerge as higher CME margins take effect on Monday, February 2. “Gold margins will rise to 8 per cent from 6 per cent for non-heightened risk profiles, and to 8.8 per cent from 6.6 per cent for heightened risk profiles. Silver margins will increase to 15 per cent from 11 per cent for non-heightened risk profiles, and to 16.5 per cent from 12.1 per cent for heightened risk profiles,” according to a CME exchange statement released Friday.
“Given elevated prices, a buy-on-dips strategy is preferable. Gold is expected to find support in the 5,000-5,100 zone, while silver has strong support in the 95-102 range. The medium-term outlook for both metals remains constructive amid persistent geopolitical and policy uncertainty,” Chainwala said.
“For investors, this isn’t a moment for panic. Gold and silver are portfolio hedges, not trading bets. If your allocation is sensible, staying put makes sense,” Garg advised.
Published on February 1, 2026
