Global Gold and Silver Prices Crash After CME Margin Hike and Profit-Booking
Gold and silver prices experienced a dramatic crash during Friday's commodity market sessions across the world. This sharp decline was triggered by a margin hike announcement from the CME Group and aggressive profit-booking moves by investors.
CME Group's Margin Increase Sparks Market Turmoil
The Chicago Mercantile Exchange (CME) Group announced a significant increase in margins for precious metals, effective from Monday, 2 February 2026. According to reports, the margin on gold futures was raised from 6% to 8%, while the margin on silver futures was hiked from 11% to 15%. This regulatory move created immediate pressure on market participants.
Severe Losses in Indian and International Markets
The impact was felt strongly in both Indian and global markets:
- MCX Gold Futures: On the Multi-Commodity Exchange (MCX), gold futures plummeted by 12%, closing at ₹149,075 per 10 grams. This represented a drop of ₹20,328 from the previous close of ₹169,403 per 10 grams.
- MCX Silver Prices: Silver prices crashed even more severely, falling by 27%. The closing rate was ₹291,922 per kilogram, wiping off over ₹100,000 from its previous close of ₹399,893 per kilogram.
- Global Markets: COMEX gold and silver also suffered major losses, mirroring the downturn seen in Indian markets. City prices across India reflected similar declines.
Expert Analysis: Will Gold Recover?
Market experts express concerns about whether precious metal prices can bounce back after these significant losses. Amit Goel, Chief Global Strategist at Pace 360, provided a critical outlook for gold's recovery.
"If gold prices fail to regain the $4,900-per-ounce level on Monday, we can assume the precious metal has topped out," said Goel. He further explained that after topping out, gold prices could potentially decline to $3,800 per ounce by the end of October 2026.
Goel cautioned that this downward movement might not be straightforward: "This fall may not be one directional, and the precious yellow metal is expected to reach this level, doing a dead-cat bounce from every new low."
Market Sentiment and Future Outlook
The combination of regulatory action and investor behavior has created a challenging environment for precious metals. The margin hike increases trading costs, potentially reducing speculative activity, while profit-booking indicates that investors are capitalizing on recent gains amid uncertainty.
As markets prepare for Monday's trading session, all eyes will be on whether gold can reclaim the crucial $4,900 level on COMEX. The outcome will likely set the tone for precious metal trends in the coming months, with experts warning of potential further declines if recovery fails to materialize.
