Gold – Precious Metals Extend Volatile Run as Dollar Strength Pressures Prices
Gold – Precious metal prices returned to the spotlight on February 2 as gold and silver struggled to find direction after a brief recovery from one of their sharpest single-day declines in years. The rebound proved short-lived, with both metals slipping again amid continued volatility driven by currency movements and shifting global economic signals.
Gold prices weakened notably in the latest session, falling close to 4,561.62 after a decline of nearly 6.8 percent. Silver prices also remained unsettled, recording wide intraday fluctuations that reflected persistent caution among traders following last week’s abrupt correction.
Global Factors Driving Renewed Selling Pressure
The latest bout of instability has been linked to developments in the United States, where President Donald Trump’s nomination of Kevin Warsh as the next Chair of the Federal Reserve reshaped market expectations. The announcement strengthened the US dollar and reinforced the outlook for tighter monetary policy, which typically diminishes the appeal of non-yielding assets such as gold and silver.
As the dollar index advanced, investors shifted toward currency-linked assets, placing renewed pressure on bullion markets. The stronger dollar environment, combined with lingering uncertainty over global growth and interest rate trajectories, has kept risk appetite muted across commodities.
Short-Lived Recovery Fails to Gain Traction
After Friday’s steep sell-off, gold prices attempted to stabilise, briefly recovering some losses before encountering resistance. Early gains in US gold futures hinted at tentative buying interest, but momentum faded quickly as currency strength capped upside potential.
Silver, which experienced the heaviest losses during the previous session, staged a sharper rebound. Prices jumped more than 8 percent on Monday, retracing part of an almost 12 percent fall seen earlier. Despite the bounce, trading conditions remained erratic, underscoring fragile confidence in the market.
Domestic Market Reflects Global Weakness
In the Indian market, silver continued to underperform. Spot silver was quoted near ₹2.50 lakh per kilogram, registering a decline of nearly 6 percent or about ₹15,990. MCX silver futures slipped even further, falling over 6.4 percent to around ₹2.48 lakh per kilogram as traders booked profits and responded to higher margin requirements.
Gold prices on the MCX also opened lower. The contract began trading close to ₹1,46,000 per 10 grams, down about 1 percent from the previous close. As the session progressed, prices remained under pressure, trading around ₹1,46,500, reflecting a decline of nearly 0.8 percent. Silver contracts followed a similar pattern, extending losses after a weaker opening.
Futures Contracts Show Continued Weakness
March 5, 2026 silver futures on the MCX declined by roughly ₹10,000, or 3.7 percent, to settle near ₹2,55,652 per kilogram. Gold futures for April 2, 2026 delivery also eased, falling about 3 percent to ₹1,43,501 per 10 grams. These moves followed sharp declines in the previous session, when silver futures dropped nearly 9 percent and gold contracts fell around 3 percent.
Analysts Flag Elevated Volatility Ahead
Market experts cautioned that volatility in precious metals is likely to remain elevated in the near term. Some analysts expect silver to find initial support around the $68 level, while gold could stabilise near $4,510 during the week.
Ponmudi R, CEO of Enrich Money, noted that COMEX gold is currently trading within the $4,580 to $4,700 range after retreating from a rapid surge above $4,900. He said the broader trend remains positive, but the recent rally pushed technical indicators into overbought territory, prompting profit-taking. According to him, buying interest is gradually emerging between $4,500 and $4,400, which now serves as a key support zone.
Cautious Outlook as Markets Digest Recent Moves
Manoj Kumar Jain of Prithvi Finmart highlighted the unusually high volatility across precious metals. He expects gold to defend the $4,440 level on a closing basis this week, while silver may hold near $65 per troy ounce. Ongoing fluctuations in the dollar index and geopolitical uncertainties are likely to keep prices unstable, he added.
Rahul Kalantri, Vice President of Commodities at Mehta Equities, said that although the broader outlook for MCX gold remains positive, sharp intraday swings suggest short-term overheating. He advised investors to remain cautious and wait for volatility to ease before taking fresh positions.
Advisories from Kedia Advisory Commodity News echoed a similar tone, urging market participants to avoid new bullion trades at current levels. High profit booking, increased margin requirements, a firm dollar, and selling pressure from exchange-traded funds continue to contribute to choppy price action. With sharp reversals still possible, investors are preparing for ongoing turbulence in precious metal markets.