MCX shares tanked up to 15% to hit a lower circuit of Rs 2,146 on February 1, after gold and silver prices crashed 6% each, extending the selloff after their worst-ever crash on Friday. Profit-taking and a strengthening US dollar emerged as key drivers behind the sharp correction. The MCX is open for trading on Sunday in a special session as the government presents the Union Budget 2026.
MCX Gold futures due April 2, 2026, were down Rs 9,140 or 6% to Rs 1,43,205 per 10 grams. Meanwhile, silver futures for March 5, 2026, delivery edged lower by Rs 17,515 or 6% to Rs 2,74,410 per kg.
Any sharp correction in gold and silver directly weighs on volume visibility and near-term earnings expectations, prompting selling pressure in the stock.
Earlier this month, MCX said in a circular, “On account of presentation of Union Budget, a special live trading session will be held on Sunday, February 1, 2026. The market timings shall be as under: Special Session 08:45 a.m. to 08:59 a.m.; Trading Session 09:00 a.m. to 05:00 p.m.; Client Code Modification Session 09:00 a.m. to 05:15 p.m.”
Precious metals retreat after sharp rally
The decision to hold trading on a Sunday comes amid a violent pullback in precious metals, triggered by aggressive profit-booking and a strengthening US dollar following speculation around the leadership of the US Federal Reserve.
On Friday, MCX March silver futures plunged 16% to Rs 3,36,154 per kg, while MCX April gold contracts fell 8% to Rs 169,600 per 10 gm. In the latest session, MCX gold February futures dipped 9% while MCX silver March futures slid 25%, with gold futures at Rs 1,49,075 and silver futures at Rs 2,91,922 per kg.
The price of 10 gram 24-carat gold stood at Rs 1,65,795, down from Rs 1,75,340 at the previous day’s close, according to data published by the India Bullion and Jewellers Association.
Overseas, spot silver on COMEX fell more than 14% to $99.77 an ounce as investors booked profits and the US dollar strengthened on the imminent appointment of a new US Federal Reserve chair. Gold slid below $5,000 an ounce on COMEX, though it remained on track for its strongest monthly gain since 1999 on safe-haven demand.
“Although a significant part of the move in the rise in silver has been based upon sound fundamentals, there was clearly a speculative excess within the market and I think that’s getting blown off,” independent analyst Ross Norman told Reuters.
Fed leadership speculation weighs on metals
Market volatility has been fuelled by speculation over US monetary policy following the nomination of Kevin Warsh as the next Federal Reserve chair by US President Donald Trump, a development that has strengthened the dollar and weighed on precious metals.
While Warsh, a former Fed governor, is seen as an advocate of lower interest rates, he is also considered to be one of the less radical choices among the various names that have been raised and is perhaps more cautious on heavy monetary stimulus than others.
On the prediction market site Polymarket, the implied probability of contracts betting that Trump will nominate Warsh to lead the central bank surged to 94% from 35% earlier in the day, as per reports.
The yield on the US 10-year Treasury bond was last up 4.6 basis points at 4.273%. Fed funds futures are pricing an implied 84.6% probability that the US central bank will hold steady on rates at its next meeting in March, slightly lower than the previous day’s 87.5% chance, according to the CME Group’s FedWatch tool.
Analysts said Warsh would be less supportive of lower interest rates due to his hawkish stance on inflation control and emphasis on Fed independence, prompting selling among precious-metals traders.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of the Economic Times)
Curated by Ahmed Ibrahim
