Precious Metals Sell-Off Accelerates Amid Global Uncertainties
Despite elevated geopolitical tensions, persistent trade worries, and ongoing policy uncertainty in Washington, the sell-off in precious metals deepened significantly during Monday's trading session on February 2. Investors appeared to accelerate their dumping spree across the sector, moving away from assets that were once trading at record highs just weeks ago.
Platinum and Palladium Face Severe Pressure
Apart from gold and silver, platinum prices faced particularly significant downward pressure during the session. Spot platinum fell another 14% to reach a low of $1,858 per troy ounce, extending its losing streak to three consecutive days. Taking today's low into account, the metal has lost a cumulative 30.2% of its value over this three-day period and is down approximately $1,027, or 35.6%, from its recent peak of $2,885.
Palladium has also experienced substantial declines, falling about 31% from its recent record highs. Both platinum and palladium, which are widely used in automotive catalytic converters, had made remarkable gains throughout 2025. Spot platinum finished the year with an impressive 126% increase, marking the largest annual advance since at least 1987 and representing twice the rally seen in gold during the same period.
Palladium closed 2025 with a massive 81% surge, driven primarily by tight supply conditions, tariff uncertainties, and rotation from gold investment demand. The dramatic reversal in these metals' fortunes has caught many market participants by surprise.
Gold Prices Continue Their Downward Trajectory
After experiencing a crash of ₹7,436 per 10 grams in the previous session, gold prices remained under significant pressure today. February future contracts fell another ₹5,152, or 3.6%, to reach the day's low of ₹1,37,065 per 10 grams. This latest decline brings the gold rate down by ₹43,714 per 10 grams, or 25%, from its recent peak of ₹1,80,779.
During Friday's trading session, gold prices on the Multi Commodity Exchange (MCX) tanked nearly ₹20,000 per 10 grams to ₹1,49,653, representing the biggest single-day crash in recent history. Before this significant downturn, gold had climbed almost 25% since the beginning of January, but the sell-off has erased the majority of those gains, bringing its monthly return to 10.5%. Despite this correction, gold has maintained its monthly winning streak at eight consecutive months.
Silver Prices Experience Dramatic Reversal
Silver prices, which had enjoyed a dramatic upward run throughout January, have completely reversed those gains in recent sessions. March delivery futures contracts on MCX tumbled another ₹40,000 per kilogram during today's intraday session, falling to the day's low of ₹2,25,805.
This decline followed a ₹26,273 crash during the special trading session on Sunday, February 1. The three-day sell-off in silver prices, including today's session, has resulted in a total decline of ₹1,94,243, or 46%, from Thursday's peak of ₹4,20,048. In the international market, spot silver prices plunged 16% to reach the day's low of $71.31 per ounce.
What's Driving the Ongoing Precious Metals Sell-Off?
The widespread sell-off across precious metals was initially triggered on Friday after US President Donald Trump nominated Kevin Warsh to lead the Federal Reserve. This announcement sent the US dollar higher and undercut sentiment among investors who had previously bet on Trump's willingness to let the currency weaken.
Traders regard Warsh as the toughest inflation fighter among the final candidates for the position, raising expectations of tighter monetary policy that would further strengthen the dollar and weaken greenback-priced bullion. Despite this development, investors continue to expect one Fed rate cut in June and another later in the year, possibly in October.
Apart from the expected hawkish stance from the Federal Reserve, margin hikes announced by the CME Group have also contributed to the selling pressure. According to Reuters reports, CME Group announced increases in margins on its metal futures on Saturday, with these changes set to take effect after market close on Monday.
Disclaimer: We advise investors to consult with certified financial experts before making any investment decisions regarding precious metals or other financial instruments.
