Mumbai: Gold and silver prices have been falling for the last three days, raising concerns among investors. On February 2, 2026, gold and silver saw another sharp decline after hitting record highs earlier.
On the domestic market, MCX gold futures fell 3.22 percent to Rs 1.43 lakh per 10 grams, while MCX silver futures dropped to Rs 2.48 lakh per kg. In global markets, gold was trading near USD 4,662 per ounce and silver around USD 75 per ounce.
Main reason behind the fall
The biggest reason for the fall is heavy selling in global metal markets. This selling started after US President Donald Trump nominated Kevin Warsh as the next Chairman of the US Federal Reserve.
Warsh is considered strict on interest rates, which means higher chances of rate hikes. Higher interest rates usually reduce demand for gold and silver because investors prefer assets that give better returns, like bonds.
Another key trigger was the increase in margin requirements by the Chicago Mercantile Exchange (CME) on metal futures. Higher margins make trading expensive, forcing many traders to cut their positions.
What is happening in physical gold?
Physical gold prices in major Indian cities also softened. However, 24-carat gold continued to trade above Rs 15,000 per gram in metro cities. Among them, Chennai recorded the highest prices.
Why silver is falling more than gold?
Silver saw a sharper fall compared to gold. In the spot market, silver fell nearly 6 percent, while MCX silver futures dropped over 6.4 percent.
Over the last one year, silver had performed better than gold. Because of this, profit booking was higher in silver, leading to a stronger correction.
Global factors increasing pressure
Analysts said several global factors added pressure on precious metals. These include a strong US dollar, high US Treasury yields, and higher-than-expected US producer inflation data.
All these factors reduce the attractiveness of gold and silver as safe investment options.
What should investors watch next?
Investors will now focus on manufacturing data from Japan, China, the UK, France, Germany, the Eurozone and the US. These numbers will give clues about the global economic outlook.
Impact on ETFs
Gold and silver ETFs also fell sharply on February 2. Due to continued weakness in metal prices, most ETFs came under pressure.
Major silver ETFs such as Edelweiss, Axis, UTI, DSP, Aditya Birla, Kotak, Mirae, Motilal Oswal, HDFC and ICICI saw falls of 18 percent to 20 percent.
Gold ETFs like Birla Sun Life, Motilal Oswal, ICICI, Mirae, Edelweiss, HDFC and Nippon also declined by 8 percent to 9 percent.
