Bullion Bloodbath: MCX Silver Locked at 15% Lower Circuit, Gold Down 10%

Silver prices crashed to the 15% lower circuit on Friday, while gold slumped sharply, triggering extreme volatility across the bullion market on the Multi Commodity Exchange of India (MCX).

Silver futures plunged the maximum permissible 15% during intraday trade, while gold contracts fell nearly 10% at the session’s low, marking one of the steepest single-day declines for precious metals in recent years. The sell-off followed a powerful rally that had pushed prices to record highs, prompting aggressive profit-booking as global cues turned unfavourable.

The sharp correction came a day after gold crossed Rs 1.75 lakh per 10 grams and silver surged past Rs 4 lakh per kg. Market data showed heavy selling across bullion and base metals, with MCX iCOMDEX indices reflecting broad-based weakness. Prices swung sharply through the session before stabilising, underscoring heightened volatility in commodities.

MCX price update

By 4:45 pm, silver had recovered from the lower circuit and was trading at Rs 3,58,900 per kg on the MCX, still down about 10% from the previous close. Gold also trimmed losses to trade at Rs 1,63,550 per 10 grams, lower by 3.46%.

Why are bullion prices falling?

Analysts said the fall reflects stretched valuations after the recent surge, coupled with profit-taking and a shift in global risk sentiment. Markets are also reacting to renewed uncertainty around US monetary policy and political developments, which have strengthened the US dollar and reduced demand for safe-haven assets.

Kaynat Chainwala, assistant vice-president (commodity research) at Kotak Securities, said bullion prices reversed sharply on global profit-taking and a broader risk-off mood.

“Gold slipped towards $5,100 per ounce and silver towards $108 per ounce on profit-taking, compounded by a broader sell-off across global markets,” she said, adding that volatility remained elevated despite intraday rebounds.

Selling pressure intensified after reports that US President Donald Trump may nominate inflation hawk Kevin Warsh as the next Federal Reserve chair, raising fears of tighter monetary policy. “A potentially less dovish Fed chair, a rebound in the dollar and overbought conditions have weighed heavily on gold,” Reuters quoted KCM Chief Trade Analyst Tim Waterer as saying.

Matt Simpson, senior analyst at StoneX, also noted that rumours of Warsh replacing Jerome Powell pressured gold during Asian trade. Manav Modi, commodities analyst at Motilal Oswal Financial Services, said gold and silver hit lower circuit levels across all MCX formats, including mega and mini contracts.

“This is strong profit-booking from higher levels, and ETF prices are down much more sharply than futures,” he said.

What should investors do?

Nikunj Saraf, CEO of Choice Wealth, said the sharp fall in gold and silver ETFs reflects classic profit-taking after record highs. “A hawkish Fed outlook has strengthened the dollar and pushed overbought metals sharply lower,” he said, adding that Indian ETFs mirrored the global sell-off.

“For investors, this correction tests conviction. Avoid panic selling, stay diversified and watch for potential rebounds driven by central bank demand. Long-term investors may choose to hold through near-term volatility,” Saraf said.