Mumbai: Gold and silver prices fell sharply in futures trade on Friday as traders booked profits after the metals touched record highs in the previous session. The fall came as global markets turned cautious and the US dollar strengthened.
On the MCX, silver futures for March delivery dropped by over Rs 12,000, or around 3 percent, to Rs 3,87,724 per kg. A day earlier, silver had jumped nearly 9 percent to hit a lifetime high of Rs 4,20,048 per kg before easing.
Gold futures for February also fell by more than Rs 2,100, or around 1.3 percent, to Rs 1,67,241 per 10 grams. In the previous session, gold had surged to a record high of Rs 1,80,779 per 10 grams.
Main reason: profit booking
The biggest reason behind the fall is profit booking. After a very sharp rally, traders chose to sell and lock in gains.
Both gold and silver had risen strongly in recent days, touching all-time highs. When prices rise too fast, many investors prefer to exit and take profits, which leads to sudden price corrections.
Strong US dollar puts pressure
Another key reason for the decline is the rebound in the US dollar. A stronger dollar usually makes commodities like gold and silver more expensive for buyers in other countries, which reduces demand.
The dollar index recovered from recent lows, while the USD/INR pair hit record levels. This put extra pressure on precious metal prices in both global and domestic markets.
Physical demand slows down
High prices have also reduced physical demand for gold and silver. Many jewellery buyers are staying away due to record prices.
The World Gold Council has said that central bank gold purchases slowed in late 2025. It also warned that India’s gold imports may fall this year as high prices impact jewellery demand.
When physical demand weakens, it adds to selling pressure in futures markets.
Global markets also turn weak
Globally, gold and silver also saw sharp falls. On the Comex, gold prices dropped over 2 percent to around USD 5,236 per ounce after hitting a lifetime high above USD 5,600.
Silver fell nearly 4 percent to around USD 110 per ounce after touching a record level of USD 121.
Global investors are becoming cautious due to changing expectations around US interest rates and monetary policy, which has reduced demand for safe-haven assets like gold.
What traders will watch next?
Traders are now focusing on upcoming US inflation data, especially the Producer Price Index (PPI). These numbers will give more clarity on interest rate direction.
If the dollar remains strong and profit booking continues, gold and silver prices may stay volatile in the near term.
Disclaimer: This article is for informational purposes only and does not constitute financial or investment advice. Commodity prices are subject to market risks, and readers should consult certified advisors before making decisions.
