Gold and silver prices are under close observation as they seek to rebound following a significant downturn, with all eyes on how they will react to the Union Budget 2026. The Multi Commodity Exchange of India (MCX) will remain open for trading on Sunday, February 1, in a special session as the government presents the Union Budget 2026.
Precious metals experienced a turbulent period, marked by a sharp correction after reaching record highs. On January 30, gold futures on MCX for April expiry fell nearly 5%, trading around ₹1,75,100 per 10 grams, after having touched a lifetime high of ₹1,93,096 per 10 grams just a session earlier. Similarly, silver futures for March delivery dropped around 6% to ₹3,75,900 per kg. This fall represented one of the sharpest single-day corrections in recent months.
Multiple factors contributed to this downturn. Profit-taking after a steep rally in precious metals, coupled with a rebound in the US dollar, added pressure on gold and silver prices. According to Manav Modi from Motilal Oswal Financial Services Ltd, the rebound in the US dollar triggered aggressive profit-taking after gold and silver hit record highs. The dollar index bounced back from recent lows, while the USD/INR pair reached a record high.
Despite the recent correction, the outlook for gold and silver remains bullish, driven by geopolitical and trade uncertainties that have raised concerns about global economic growth prospects for FY27. Ponmudi R, CEO of Enrich Money, stated that the recent correction reflects a leverage-driven flush and sentiment reset rather than a reversal of the broader trend. He anticipates that disciplined buying at lower levels, guided by key support zones and broader channel trends, will shape the next phase of the ongoing bull market into 2026.
In India, gold mirrored the global selloff, retreating from highs near Rs 1,80,000+ to stabilize around Rs 1,49,500–Rs 1,49,653. Key support lies in the Rs 1,40,000–Rs 1,45,000 zone, bolstered by the firm USD/INR backdrop. A sustained rebound above Rs 1,55,000 could reignite momentum toward Rs 1,65,000–Rs 1,80,000+ in the coming months, supported by domestic tailwinds and structural demand. Silver witnessed a sharp correction from record highs near Rs 4,20,048 per kg to the Rs 2,91,925–Rs 2,91,000 range. Key structural support is seen around Rs 2,91,000, with stronger support placed near the Rs 2,51,000–Rs 2,52,000 zone, which aligns with the 50-day EMA.
The World Gold Council has expressed concerns about a potential decline in India's jewelry demand due to record-high prices. They also noted a slowdown in central bank purchases in Q4 2025, although strong investor interest helped offset this decrease.
Market participants will be closely watching Finance Minister Nirmala Sitharaman's Union Budget 2026 presentation on February 1, expecting measures to reduce costs and simplify trade procedures. The budget is expected to be a key factor driving sentiments in gold and silver in the coming month. CME Group has also raised margin requirements on Comex gold and silver futures to safeguard market stability amid heightened volatility.
