Precious Metals Plunge: Gold and Silver Prices Witness Sharp Decline Following CME Margin Hike
In a dramatic turn of events, gold and silver prices experienced a significant crash on Friday, driven by aggressive profit-booking triggered by margin-hike speculation on the Chicago Mercantile Exchange (CME). This development sent shockwaves through global commodity markets, with precious metals losing substantial value in both international and domestic exchanges.
International Markets: COMEX Gold and Silver Suffer Heavy Losses
The COMEX gold price concluded trading with a staggering decline of over 11 percent, settling at $4,763.10 per ounce. This represents a notable drop of approximately 15 percent from its record high of $5,625.16 per ounce. Similarly, the COMEX silver price faced even more severe pressure, ending the session more than 31 percent below its lifetime peak of $121.755 per ounce.
Domestic Scenario: MCX Futures Reflect Substantial Declines
In the Indian market, the MCX gold rate for April futures closed at ₹1,50,849 per 10 grams, marking an intraday loss of ₹1,496 or 0.98 percent compared to the previous day's closing price of ₹1,52,345 per 10 grams. Currently, the MCX gold rate stands ₹29,930 or 16.55 percent away from its all-time high of ₹1,80,779 per 10 grams. Likewise, the MCX silver price for March futures ended at ₹2,91,922 per kilogram, which is ₹1,28,126 or 30.50 percent below the record high of ₹4,20,048 per kilogram.
Expert Analysis: Multiple Factors Driving the Precious Metals Sell-Off
Anuj Gupta, a SEBI-registered commodity expert, highlighted the primary catalyst for the sharp decline. "The CME has increased margin money on copper to 20 percent, which has triggered margin hike buzz for gold and silver as well. Since gold and silver prices were already in an overbought condition, and the US Dollar is under pressure following the announcement of Trump's nominee for US Fed Chairman to replace Jerome Powell, the CME margin hike speculation triggered panic selling in these metals," he explained.
Nikunj Saraf, CEO at Choice Wealth, pointed to broader macroeconomic factors. "A hawkish Fed chair pick under President Trump sparked global fears of tighter monetary policy, strengthening the US Dollar and crushing overbought metals," he stated. Saraf also warned that the sharp sell-off in physical gold and silver could trickle down to gold and silver Exchange-Traded Funds (ETFs).
Amit Goel, Chief Global Strategist at Pace 360, emphasized the role of diminishing uncertainty. "After the announcement of the next US Fed chief, policy uncertainty regarding the US Federal Reserve has evaporated. The market now has clarity on the alignment between the US Central Bank's Chairman and President Donald Trump regarding interest rates," he noted. Goel added that the US Fed's decision to maintain unchanged interest rates further bolstered the US Dollar, adversely affecting the gold and silver price rally. He also mentioned that easing tensions between the US and Iran played a crucial role in reducing safe-haven demand for these metals last week.
Budget 2026: A Potential Catalyst for Further Downside
Advising investors to remain vigilant, Anuj Gupta highlighted the upcoming Union Budget 2026 as a critical factor. "We may witness further downside in gold and silver prices within the domestic market. Speculation suggests that the central government might announce an import duty cut to stimulate demand in the jewellery sector, which has been severely impacted by soaring prices. Several delegations from the gems and jewellery industry have already demanded reductions in import duties on gold and silver. Consequently, any such announcement in the Union Budget 2026 could lead to additional downward pressure on precious metals," he cautioned.
Key Levels to Monitor for Gold and Silver Rates
Providing technical insights, Anuj Gupta outlined crucial price ranges. "Currently, the gold rate is trading within a broader range of $4,550 to $4,900 per ounce on the CME. In the domestic context, the MCX gold rate is positioned within a short-term range of ₹1,35,000 to ₹1,80,000 per 10 grams, with a broader spectrum extending from ₹1,35,000 to ₹1,80,000 per 10 grams," he detailed.
"For COMEX silver, the broader range lies between $70 and $95 per ounce. Meanwhile, the MCX silver price is fluctuating within the ₹2,50,000 to ₹3,50,000 per kilogram bracket. High-risk investors might consider a narrower MCX silver price range from ₹2,65,000 to ₹3,20,000 per kilogram," Gupta added.
Important Considerations for Investors
The recent volatility underscores several critical takeaways for market participants. CME margin hikes can exert significant influence on precious metal prices, often triggering panic selling and rapid declines. Additionally, economic policies and governmental announcements, such as the Union Budget, possess the potential to create substantial volatility within gold and silver markets. Investors are strongly advised to remain alert to these dynamics and consult certified experts before making any investment decisions in such fluctuating environments.
Disclaimer: This article is intended for educational purposes only. The views and recommendations expressed herein are those of individual analysts or broking companies and do not reflect the立场 of Mint. Investors should verify information with certified experts prior to undertaking any investment decisions.
