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Gold rate today: Gold prices, which had maintained an uninterrupted run over the past year, took a sharp nosedive in recent sessions, marking one of the biggest crashes in recent history. Investor sentiment toward the safe haven was hit amid concerns over a firm US dollar and the nomination of Kevin Warsh as the next Federal Reserve chairperson.

During Friday's session, gold prices on MCX tanked nearly ₹20,000 per 10 grams to ₹1,49,653. Prior to the crash, gold had climbed almost 25% since the beginning of January, but the sell-off erased the majority of those gains, bringing its monthly return to 10.5%, extending the monthly winning run to eight.

Even after the sharp crash, gold prices extended their losing streak during the special trading session today (February 01), with February delivery contracts falling another ₹13,648, or 9%, to ₹1,36,185 per 10 grams.

The latest crash brings the gold rate down by ₹44,594 per 10 grams, or 25%, from the recent peak of ₹1,80,779.

Investors had flocked to safe-haven assets this year, as foreign policy actions by the US, including the seizure of Venezuela's former leader and threats to annex Greenland, coupled with renewed tariff threats on major countries, including the European Union, South Korea, and Canada, have been major drivers.

In terms of yearly performance, gold prices finished CY25 with a stellar gain of 76.5%, as sustained buying from global central banks also pushed the metal to a historic surge.

Silver prices, too, have remained under pressure, with March delivery contracts on MCX falling another ₹26,273 per kilogram in today’s trade to ₹2,65,652, dragging it ₹1,54,396 below the peak of ₹4,20,048.

Warsh Nomination: The primary trigger was the nomination of Kevin Warsh as the next US Federal Reserve Chair, fueling speculation of a more hawkish monetary policy and higher interest rates.

Market moves suggested that traders are dialing back expectations for policy easing under Warsh, who served as a policymaker from 2006 to 2011 and often emphasized inflation risks, even as others focused on supporting growth and jobs during the financial crisis.

The announcement ended months of speculation over who would lead the Fed, after Trump repeatedly criticized Chair Jerome Powell for not cutting interest rates.

Firm US Dollar: The nomination of Warsh also boosted demand for the US dollar, which strengthened 0.73% in Friday’s session to 96.99, making dollar-priced precious metals more expensive for other currency holders.

Margin Hike: Amid sharp volatility in both gold and silver prices, CME Group is increasing margins on COMEX gold and silver futures. Gold margins will rise to 8% of the contract value from 6% for non-heightened risk profiles, Bloomberg reported, citing the exchange statement.

Silver margins will climb to 15% from 11% for non-heightened risk profiles, while heightened risk profile margins will increase to 16.5% from 12.1%, the report added.

Profit Booking: The sharp rally in gold prices also seems to have prompted investors to book profits, as prices in India jumped ₹80,000 per 10 grams in a record eight months.

Ponmudi R, CEO, Enrich Money, said, "The price has slipped back toward the ₹1,36,000 region, indicating heavy profit booking and long liquidation rather than healthy consolidation. Although the broader long-term trend was bullish, the recent move clearly reflects distribution at higher levels. The rising channel support has been decisively tested, and momentum has shifted into sell-on-rise mode."

"Immediate stability is required above ₹1,32,000– ₹1,35,000 to avoid further downside extension. Until price regains ₹1,45,000, rallies are likely to face supply, keeping the near-term outlook cautious to corrective," he further added.

Disclaimer: We advise investors to check with certified experts before making any investment decisions.

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