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Gold and silver futures saw a sharp decline on Friday as traders locked in profits following Thursday's record-breaking rally. Both Gold and silver futures on the Multi Commodity Exchange ended Friday’s session with steep losses, retreating sharply as traders booked profits following a powerful rally earlier in the week that had driven both metals to new all-time highs.
Bearish global markets and a stronger US dollar also influenced the sentiment.Gold futures expiring on February 5, 2026, slid by as much as Rs 11,000, or 6.5%, to settle at Rs 1,59,984 per 10 grams. Silver contracts for March 5, 2026, delivery saw an even steeper decline, plunging Rs 68,000, or 16.6%, to Rs 3,34,503 per kg - going below the Rs 3.5 lakh per kg mark.The dramatic shift came after both metals had achieved historic highs the previous day.
Silver had peaked at Rs 4,20,048 per kg before settling lower, while gold had touched Rs 1,80,779 per 10 grams. The pullback was particularly noticeable in international markets, with Comex gold falling 2.2% to USD 5,236.74 per ounce."After hitting record highs, gold and silver prices dropped as a rebound in the US dollar triggered aggressive profit-taking," said Manav Modi from Motilal Oswal Financial Services Ltd, as quoted by PTI.
The dollar index bounced back from recent lows of 96, while the USD/INR pair hit a record high.The World Gold Council has raised concerns about India's future gold imports. They expect a decline in jewelry demand from the world's second-largest consumer due to record-high prices. The council also noted that central bank purchases slowed in Q4 2025, though strong investor interest helped offset this decrease.Despite the current dip, gold is still headed for its best monthly performance since the 1980s.
Silver, too, remains impressive with a potential January gain exceeding 50%, its strongest monthly showing ever. Market expert Jigar Trivedi attributed this to "a weak US dollar and shifting US monetary policy outlook."
Looking ahead, traders are turning their attention to upcoming US Producer Price Index numbers, which will offer new insights into monetary policy direction. The recent price movements highlight the ongoing impact of economic uncertainty and geopolitical tensions on precious metals markets.
ETFs crashes 14%
Gold and silver exchange-traded funds (ETFs) also plunged by up to 14 per cent on Friday as investors rushed to book profits after precious metals retreated sharply from record highs, prompting debate over whether the correction offers a buying opportunity or signals the end of the powerful rally.The fall followed a surge in January, when silver jumped 56 per cent, putting it on course for its strongest monthly performance on record, while gold logged its biggest monthly gain since January 1980, rising more than 20 per cent in dollar terms.Silver-focused ETFs led the losses. Zerodha Silver ETF and SBI Silver ETF fell 14 per cent, while Nippon India Silver ETF dropped 14 per cent and Kotak Silver ETF declined 12 per cent. Gold ETFs also slipped, with Nippon India Gold ETF down 10 per cent and ICICI Prudential Gold ETF losing 6 per cent. ICICI Prudential Silver ETF fell 7 per cent.The domestic selloff tracked global markets, where spot silver slid 5.7 per cent to $109.55 an ounce after touching a record $121.64 a day earlier.
Spot gold fell 3.9 per cent to $5,183.21 per ounce, after dropping as much as 5 per cent from Thursday’s peak of $5,594.82.The sharp reversal came after US President Donald Trump said he would soon announce his pick to replace Federal Reserve Chair Jerome Powell, with reports pointing to former Fed governor Kevin Warsh as a likely candidate.“So, a potentially less dovish Fed Chairman pick, a rebound in the dollar, and gold giving way to overbought conditions have contributed to the decline in the price of the precious metal,” said KCM Chief Trade Analyst Tim Waterer, as quoted by ET.Expectations of a more hawkish Fed unsettled investors who had been betting on looser monetary policy. “Gold and silver show very high volatility, and prices dip from record high levels amid heavy profit-taking; safe-haven buying could support prices,” said Manoj Kumar Jain of Prithvi Finmart.Jain noted that both metals had ended the previous session higher in global and domestic futures markets before surging to fresh records in early trade, only to face intense profit-taking at elevated levels.Despite the selloff, the broader trend remains strong. Silver is set for its ninth consecutive monthly gain, while gold is heading for a sixth straight monthly advance. “Silver fell about 4% toward $110/oz, retreating from all-time highs as investors locked in profits following the record rally, while, rebound in the dollar added pressure on the metal,” said Jigar Trivedi, Senior Research Analyst at Indusind Securities.
“Despite the pullback, silver is on track to gain more than 50% in January, marking its best monthly performance on record and extending a winning streak to nine consecutive months," he added.The rally has been supported by persistent geopolitical and economic uncertainty, strong safe-haven demand, and a weaker dollar. Trivedi added that “silver’s surge was further supported by a tight physical market, with both investment and industrial demand hitting record levels.”
'2008-crisis levels'
An industry commentary on the global capital markets platform made a remark that vent viral on how gold's volatality has reached "2008-crisis levels". "This is absolutely insane: Gold just posted its largest daily swing in market cap in history, at $5.5 TRILLION. Between 9:30 AM ET and 10:25 AM ET, gold lost -$3.2 trillion in market cap, or -$58 billion PER MINUTE. Then, between 10:25 AM ET and 4:00 PM ET, gold added back +$2.3 trillion.
That's over 3 TIMES the market cap of Bitcoin swung in 6.5 hours, or ~$850 billion per hour," it said on X.
Further commenting on its significance, it added, "We are witnessing one of the most historic trading opportunities of all time. Gold's volatility is above 2008 levels."
What now
Outlooks for both gold and silver for the year point to strong long-term support but elevated volatility. Major banks such as UBS, Deutsche Bank and Societe Generale remain bullish on gold, citing safe-haven demand, geopolitical tensions and portfolio diversification, according to ET.
Silver forecasts are more divided. Some, such as Citigroup, see significant upside driven by structural demand and supply deficits, while stretigists Marko Kolanovic warn that prices could correct sharply if speculative positions unwind.
However, across both metals, analysts agree that price swings will remain a defining feature, shaped by macro uncertainty, monetary policy, liquidity conditions and shifting investor positioning.(Disclaimer: Recommendations and views on asset classes given by experts are their own. These opinions do not represent the views of The Times of India)
