Gold and silver fell sharply again on Monday as investors rushed to book profits amid the strengthening of the dollar. The MCX gold rate for April futures contracts opened at Rs 146,000 per 10 grams on Monday and hit a low of Rs 137,065 before staging a recovery. As of 8 pm, it was trading in the green at the Rs 148,000 level.
The MCX silver price for March futures contracts opened 0.69% lower at Rs 267,501 per kilogram on Monday but plunged 15% shortly to a low of Rs 225,805 per kg. At this level, the white metal was down 46% or Rs 1.94 lakh from its record high of Rs 4,20,000, hit on January 30. As of 8 pm, the MCX silver price for March futures was hovering around the Rs 252,000 level.
The sharp sell-off, after a record-breaking rally, is primarily attributed to a strong dollar amid US President Donald Trump’s decision to pick Kevin Warsh as Federal Reserve chairman. Investors perceive Warsh as more hawkish than other contenders and his appointment is likely to pave the way for a tighter monetary policy. This in turn would support the dollar and hurt assets like gold.
Further, the CME Group’s (which runs the COMEX exchange) decision to raise margin requirements twice in three days for several commodities added to the selling pressure.
Jateen Trivedi, VP Research Analyst - Commodity and Currency, LKP Securities, said that gold traded sharply weak in the early morning session as CME Gold slipped below the $4500 mark, dragging MCX Gold down nearly Rs 9,000 to sub-Rs 1,38,000 levels.
“However, strong short covering and bargain buying emerged thereafter, with CME recovering towards $4700 and MCX Gold bouncing back near Rs 146,500. Volatility remains extremely high following the recent margin-led correction and profit booking from record highs. Technically, key support is placed near Rs 135,000, while resistance is seen around Rs 150,000,” added Trivedi.
S Ramaswamy, Head of Commodity & CRM, Ventura, said that a steep pullback has been witnessed in gold and silver with acceleration to overextended levels and this has been supported partly by a rebound in the US dollar.
“Longer-term bullish momentum remains intact, basis the structural and diversification trend. Supporting the view is the central bank's purchases of 230 tons in Q4 of 2025. The same trend of above 800 tons of buying is expected for 2026. Wide macro and geopolitical risks are still intact leading to broader portfolio allocation into gold as a hedge. Rising ETF holdings would continue to chip in to the momentum. Gold for the year 2026 is likely to cross the highs of the “Futures” of $5645 made recently,” said Ramaswamy.
On silver, he said that the shakeout was much deeper after a dramatic surge leading to a cautious note on the recovery as compared to gold which would start its catch up rally.
“Silver is likely to remain around $72 to $78 and a breakout above $80 will decisively identify a recovery. The damage caused to silver was majorly on account of higher collateral requirements on hiking the margins forcing traders to liquidate their positions accelerating the price drop. Over the longer-term higher prices will reshape fundamentals on the aspect of supply demand balance and the eroding deficit which led to silver’s recent surge,” said Ramaswamy.