News

MCX Silver rate today crashed 15% on Monday, February 2, following a steep correction over the previous two sessions. The white metal has now fallen more than 46% or ₹1.94 lakh from its record high of ₹4,20,000, hit on Thursday (January 30) on firm dollar and as higher CME margins take effect from today.

MCX silver price tanked 15% lower circuit of ₹2,25,805 per kg.

Silver also sank in the global markets, reversing its record-breaking rally. Silver tumbled as much as 14.6% on Monday, extending loss from Friday's session that was the steepest one ever.

Gold prices also declined on MCX in Monday’s session, furthering losses after witnessing their sharpest single-day fall in more than a decade. On

MCX gold price lost 6% to day's low of ₹1,37,453/10 grams. In international markets as well, Gold extended losses, after its biggest plunge in more than a decade on Friday. Spot gold fell as much as 8%, and is now down almost a fifth from an all-time high reached on Thursday.

Over the past year, precious metals have surged to unprecedented highs, surprising even experienced traders. The rally intensified sharply in January as investors flocked to gold and silver amid concerns over geopolitical instability, weakening currencies and questions around the Federal Reserve’s independence. Additional speculative buying from China further fuelled the surge.

The immediate trigger for Friday’s steep selloff was the announcement that US President Donald Trump intended to nominate Kevin Warsh as the next Federal Reserve Chair. This development strengthened the US dollar and dampened sentiment among traders who had been positioning for a weaker currency under Trump’s leadership. Warsh is widely perceived as a firm inflation hawk, which raised expectations of tighter monetary policy supportive of the dollar and negative for dollar-priced bullion.

Further pressure came from reports that CME Group decided to increase margin requirements on Comex gold and silver futures following the largest price swings seen in decades. This comes into effect from today, February 2.

According to the exchange, margin requirements for gold futures will be raised to 8% of the contract value from the existing 6% for non-heightened risk accounts. For heightened risk profiles, margins will increase to 8.8% from 6.6%. For silver futures, margins will be increased to 15% from 11% for non-heightened risk profiles, while for heightened risk accounts, the requirement will rise to 16.5% from 12.1%. Margin requirements for platinum and palladium futures are also set to be increased.

Silver’s recent crash has prompted market experts to urge investors to temper expectations and avoid reactive decisions. While the metal continues to decline amid firm dollar, profit booking and CME margins coming in effect today, analysts believe the current phase is marked more by heightened volatility than by a stable directional trend.

Jateen Trivedi, VP Research Analyst – Commodity and Currency at LKP Securities, observed that silver is likely to remain far more volatile than gold in the near term, with the potential for sharp and exaggerated price movements. He advised that investors adopt a cautious approach and closely observe price behaviour rather than rushing into fresh positions until signs of stability become clearer.

Echoing a similar sentiment, Akshat Garg, Head Research & Product at Choice Wealth, said, “For investors, 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.”

Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before making any investment decisions.

Catch all the Business News , Market News , Breaking News Events and Latest News Updates on Live Mint. Download The Mint News App to get Daily Market Updates.

Download the Mint app and read premium stories

Log in to our website to save your bookmarks. It'll just take a moment.

Oops! Looks like you have exceeded the limit to bookmark the image. Remove some to bookmark this image.