Precious metals – gold and silver – came under heavy selling pressure in Friday’s trading session, impacted by a firm US dollar and profit-taking by investors after a sustained rally that had pushed both metals to multiple record highs.
Silver, which had outpaced gold in the recent rally, ₹72,000 per kilogram, or 20%, in its biggest intraday crash in recent times”>plunged ₹72,000 per kilogram, or 20%, in its biggest intraday crash in recent times, pushing the March delivery contract on MCX to ₹3,27,913. In the international market, spot silver prices fell 18% to the day’s low of $94.85 per ounce.
If the sell-off sustains, as appears likely, it will end the five-day rally on MCX. To be precise, silver prices had already seen a sharp correction during the late trading hours of Thursday, when prices dropped ₹20,155 from the intraday high to settle at ₹3,99,893.
Taking today’s intraday low into account, silver has declined ₹92,135, or 22%, from the record high of ₹4,20,048.
Similarly, MCX gold delivery contracts for February delivery tumbled ₹1₹1,54,157″>5,246 per 10 grams, or 9%, to reach the day’s low of ₹1,54,157. From the record high of ₹1,80,779, gold prices have crashed ₹26,622 per 10 grams.
What triggered the sharp reversal in gold and silver prices?
The unstoppable run in gold and silver prices in recent months has finally taken a sharp reversal after speculation intensified that US President Trump would pick Kevin Warsh to replace Fed Chair Jerome Powell. The sell-off deepened after Trump officially announced that he had nominated former Fed governor Kevin Warsh as the next Fed chair.
The dollar advanced following Trump’s announcement on Truth Social, making dollar-priced commodities more expensive for holders of other currencies.
Market moves suggested that traders were dialing back expectations for policy easing under Warsh, who, as a policymaker from 2006 to 2011, 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. Powell’s term ends in May, Bloomberg reported.
Meanwhile, the US dollar index, which measures the currency against six major peers, rose 0.6% to 96.76 in today’s trade. The greenback had spiked 0.54% on Wednesday, marking the biggest intraday surge in four months, after the US Federal Reserve left interest rates unchanged.
Gold, silver on track to close with sharp gains despite pullbacks
Although gold and silver prices have come off recent peaks, they are on track to close January with gains of 20% and 46%, respectively. For context, silver crossed the ₹1 lakh mark on the MCX in October 2024 and took 14 months to reach the next milestone of ₹2 lakh on 12 December 2025.
It then took just 25 days to reach the ₹3 lakh mark on 19 January. The next ₹1 lakh jump came even faster, with silver hitting ₹4 lakh in just nine trading sessions in the previous session.
Disclaimer: We advise investors to check with certified experts before making any investment decisions.
