According to the India Bullion and Jewellers Association (IBJA), silver prices in the physical bullion market dropped by ₹30,230 to ₹2,52,232 per kg. Gold prices also softened, with 24-carat gold falling by ₹3,613 to ₹1,53,012 per 10 grams. The decline followed two consecutive sessions of gains in both metals.
In the futures market on the Multi Commodity Exchange (MCX), silver prices plunged by nearly 11%, shedding around ₹28,000 per kg to trade near ₹2.40 lakh. Gold futures also slipped by about 2%, losing close to ₹3,000 per 10 grams.
Correction after sharp rally
Market participants attributed the sudden fall primarily to profit booking. Gold and silver had surged to all-time highs in recent sessions, prompting traders to lock in gains. Between January 29 and February 2, silver prices had already fallen by ₹1.60 lakh per kg, while gold had corrected by nearly ₹26,000 per 10 grams, highlighting increased volatility in the bullion market.
Demand concerns add pressure
Apart from profit booking, a slowdown in physical demand has weighed on prices. Jewellers reported reduced buying interest after prices touched record levels, while concerns over industrial demand, particularly for silver, further dampened sentiment.
Margin hike impacts futures trade
SEBI-registered commodity expert Anuj Gupta said additional pressure came from higher margin requirements imposed by the Chicago Mercantile Exchange (CME). The exchange raised margin on gold contracts from 6% to 8%, and on silver from 11% to 15%.
“When margins are increased, traders must deposit more funds to maintain their positions. Those unable to meet the requirement are forced to sell, leading to sharp price declines,” Gupta said.
MCX vs bullion pricing
Analysts noted that price variations between MCX and the bullion market are common. MCX prices fluctuate continuously due to real-time trading, while bullion prices reflect costs associated with physical delivery, transportation and storage.
Outlook
Experts expect gold and silver prices to remain volatile in the near term as global cues, margin changes and demand trends continue to influence the market. Investors are advised to track price movements closely and exercise caution during periods of sharp correction.
