Precious metals—gold and silver—are witnessing wild swings during Monday’s intraday session, with gold prices recovering all of their intraday losses and turning positive, while silver also erased most of its early-day losses, though it still trades with losses.
The February gold futures contract on MCX opened the session lower at ₹₹1,46,500 per 10 grams, with selling pressure intensifying and dragging the metal to the day’s low of ₹1,37,065 before it ₹13,825 to the day’s high of ₹1,50,890″>recovered ₹13,825 to the day’s high of ₹1,50,890.
However, prices are still down 21% from Thursday’s peak of ₹1,80,779. During Friday’s session, gold prices tanked nearly. ₹₹20,000 per 10 grams ₹1,49,653, marking the biggest intraday crash in over a decade.
Meanwhile, the March silver futures contracts have also staged a sharp recovery, bouncing back. ₹35,868 or 14% per kilogram from the day’s low of ₹2,25,805 to the day’s high of ₹2,61,673. Yet the prices are still down by 5% as of 8:00 PM.
In the international market, spot gold prices regained 11% from the day’s low to $4,884 per troy ounce, while spot silver prices recovered 23.3% from intraday lows to $87.96 per ounce.
Trump’s Fed pick, CME margin hike trigger volatility
Following a bumper rally that extended into January, gold and silver prices lost their appeal last week after US President Donald Trump nominated Kevin Warsh to lead the Federal Reserve, sending the US dollar index higher and making greenback-priced commodities more expensive for other currency holders.
Traders regard Warsh as the toughest inflation fighter among the final candidates, raising expectations of tighter monetary policy that would support the dollar and weaken dollar-denominated bullion.
Investors continue to expect one Fed rate cut in June and another later in the year, possibly in October. Apart from the anticipated hawkish stance from the Fed, a CME margin hike has also supported the sell-off.
CME Group announced hikes in margins on its metal futures on Saturday, with the changes set to take effect after market close on Monday.
Meanwhile, some blamed the sharp decline in gold and silver markets on Chinese speculators who had loaded up on leveraged long-side bets using futures and options—possibly without understanding the risks associated with such high leverage.
Bloomberg reported that Chinese metals traders have incurred losses totaling at least 1 billion yuan after one of their counterparties fled the country, leaving deals unfinished.
Precious metals bounce back, but can the rally sustain?
Jateen Trivedi, VP Research Analyst, Commodity and Currency, LKP Securities, said, “Gold traded sharply weak in the early morning session as CME Gold slipped below the $4,500 mark, dragging MCX Gold down nearly. ₹9,000 to sub- ₹1,38,000 levels. However, strong short covering and bargain buying emerged thereafter, with CME recovering towards $4,700 and MCX Gold bouncing back near ₹1,46,500.”
He said volatility remains extremely high following the recent margin-led correction and profit booking from record highs. Technically, key support is placed near ₹1,35,000, while resistance is seen around ₹1,50,000.
Ponmudi R, CEO of Enrich Money, said, “The broader trend for silver remains decisively bullish, with the steep rising channel intact and major EMAs providing strong dynamic support. The ₹2,35,000– ₹3,40,000 zone remains a critical base.”
Immediate resistance is seen near ₹2,90,000– ₹2,92,000, with potential extension towards ₹3,25,000 if momentum sustains. Dips continue to offer accumulation opportunities for positional participants, according to Ponmudi.
Disclaimer: : This story is for educational purposes only. 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.
