Gold and silver prices experienced a historic crash on February 1, 2026, following a period of unprecedented rallies. On the Multi-Commodity Exchange (MCX), gold and silver futures plunged by 9% in early trading, hitting lower circuits during a rare Sunday session coinciding with the Union Budget 2026 presentation. This correction followed even steeper single-day drops on January 30, where silver plummeted up to 27% and gold tanked 12%.
Key Market Developments
Circuit Limits: Following the extreme volatility, the BSE imposed a 20% circuit limit on gold and silver ETFs on February 1 to protect investors from further abrupt price swings.
Price Levels: On February 1, MCX gold futures (February 2026 expiry) dropped below the ₹1.40 lakh per 10 grams mark, while silver futures for March delivery crashed to approximately ₹2.65 lakh per kg.
Budget Impact: Despite industry expectations, the Union Budget 2026 did not include cuts to customs duty or GST for precious metals, which further dampened sentiment.
Global Pressures: The crash was exacerbated by a strengthening US dollar and the nomination of Kevin Warsh as the next US Federal Reserve Chair, whose hawkish stance led to a sharp rotation away from non-yielding assets.