Silver plummets 33% in 2 days, down Rs 1.35 lakh; gold tanks 18%. Time to buy or wait?

The bloodbath in precious metals deepened for a second consecutive day on February 1, with silver plunging 9%, wiping out 33.5% or around Rs 1.35 lakh of its value in just two days after hitting an all-time high above Rs 4 lakh earlier this week.

Gold mirrored the weakness, sliding 18% or over Rs 31,000 over the same period, after touching a record peak of Rs 1.93 lakh last month.

In today’s session, MCX Gold futures due April 2, 2026, were down Rs 14,000 or 9% to Rs 1,38,634 per 10 grams. Meanwhile, silver futures for March 5, 2026 delivery edged lower by Rs 26,273 or 9% to Rs 2,65,652 per kg.


The drop came after U.S. President Donald Trump announced Kevin Warsh as his choice for the new Federal Reserve Chair. The development strengthened the US dollar, pushing it above the 97 mark as concerns over central bank independence eased following Warsh’s nomination.

A stronger US dollar is typically negative for gold because the yellow metal is globally priced in US dollars, making it more expensive for foreign buyers and thereby dampening demand.

Fateful Friday

On Friday, silver delivered a stunning reversal on MCX, plunging up to 27% — or Rs 1,07,968 — in a single day, marking its worst ever crash and dragging prices back below the Rs 3 lakh mark, just a day after the metal had soared to a record high of Rs 4 lakh.

Gold prices tanked as much as 12% or Rs 20,514 in a single day on January 30, marking their worst one-day rout since March 2013, when prices had plunged 9% on the MCX.

How should investors navigate?

“Selling pressure intensified on the MCX today, with both metals hitting lower circuits, sliding 9% earlier amid a brutal session, compounding Friday’s steep losses of 17% in gold and 27% in silver. Currently, gold trades 5% 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,” Kaynat Chainwala, AVP Commodity Research, Kotak Securities, said. “Globally, further downside pressure may emerge at the start of the week as higher CME margins take effect on Monday, February 2,” he added.

Akshat Garg, Head Research & Product of Choice Wealth, said 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. ETFs tend to exaggerate moves on such days, both up and down.

For investors, Garg said, 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. If anything, staggered buying during corrections works better than chasing rallies. Volatility hurts emotions, not long-term plans”.

Gold is now trading close to its 20-day EMA, while the long-term upward channel remains intact. Key support is placed at Rs 1,40,000–Rs 1,45,000, reinforced by a firm USD/INR backdrop. As long as prices hold above Rs 1,40,000, the medium-term bias stays constructive. A sustained move above Rs 1,55,000 could revive momentum toward Rs 1,65,000–Rs 1,80,000+ in the coming months, supported by domestic tailwinds and structural demand, says Ponmudi R, CEO of Enrich Money.

Silver witnessed a steep correction, sliding from peaks near Rs 4,20,048 per kg to around Rs 2,91,000–Rs 2,91,925. Volatility remains elevated, though immediate structural support is visible near Rs 2,91,000, with stronger confluence at Rs 2,51,000–Rs 2,52,000 around the 50-day EMA, he added.

(Disclaimer: Recommendations, suggestions, views, and opinions given by the experts are their own. These do not represent the views of The Economic Times.)