Gold, silver prices crash on Budget 2026 day; hit lower circuit levels in futures trade - what’s causing the slide?

Gold and silver prices tumbled on Sunday, hitting their lower circuit levels in futures trade, ahead of Union Budget 2026-27 presentation. Gold futures for April 2, 2026, delivery fell Rs 9,140, or 6%, to Rs 1,43,205 per 10 grams, while silver futures for March 5, 2026, delivery dropped Rs 17,515, or 6%, to Rs 2,74,410 per kg.

As the precious metals continued their steep fall, MCX shares slipped 10% to hit the lower circuit of Rs 2,145.25. The selloff follows Friday’s historic crash, which saw both silver and gold record their sharpest single-day falls. According to analysts, investors rushing to book profits and a stronger US dollar were key drivers behind the correction.




The MCX remained open on February 1, for a special Sunday session as finance minister Nirmala Sitharaman is set to present the Union Budget 2026.

The sudden dip came after months of record-breaking gains in both metals. Gold had surged to Rs 1,83,000 per 10 grams and silver to Rs 4,04,500 per kg on Thursday. By Friday, gold futures for February delivery were trading at Rs 1.5 lakh per 10 grams, and silver for March delivery had fallen to Rs 3 lakh per kg, recording a drop of more than Rs 1 lakh.

According to Mirae Asset ShareKhan data, the yellow metal's market capitalisation fell by almost $3.5 trillion, while silver shed approximately $1.5 trillion, taking the combined decline to $5 trillion.

Despite the recent plunge, gold has gained $3 trillion and silver $2 trillion since the start of the year. Over the past two years, international gold prices have risen 150%, while silver has climbed 326%.

Experts said the fall was driven by a mix of profit-booking, heavy liquidation of long positions, and a strengthening US dollar. Speculation over the US Federal Reserve’s leadership added further pressure. President Donald Trump’s nomination of Kevin Warsh, an inflation hawk, surprised markets.

Maneesh Sharma, AVP - commodities & currencies at Anand Rathi Shares and Stock Brokers, told TOI, “on Wednesday, US Fed also maintained the status quo, keeping rates unchanged after revealing an improvement in the labor market. Regarding inflation, they said that it remains elevated and sticks to its data-dependent and meeting-by-meeting approach.”

He added, “Sharp moves in precious metals seen on Friday reflected speculation that Warsh may be less enthusiastic to cut rates given his past warnings of inflation risks and more recent calls for the Fed to reduce its balance sheet. This led to a rise in Dollar & Yields weighing on sentiments for bullions complex.”

(Disclaimer: Recommendations and views on the stock market, other asset classes or personal finance management tips given by experts are their own. These opinions do not represent the views of The Times of India)