Gold and silver prices slumped in international markets on Friday, after a blistering rally through January that saw multiple record highs, as investors rushed to lock in profits amid speculation that a more hawkish chair would soon head the US Federal Reserve.
On the Comex, gold dropped by as much as 8 per cent slipping below the psychologically important $5,000 mark to an intraday low of $4,950 per ounce, while silver fell below $100 per ounce to touch $95.12, plunging more than 20 per cent in the biggest intraday drop since 2008, according to Bloomberg data.
Domestic prices mirrored the global correction. In New Delhi, pure gold of 99.9 per cent purity plunged by ₹14,000, or 7.65 per cent, to ₹1,69,000 per 10 grams. It had touched an all-time high of ₹1,83,000 per 10 grams in the previous session after rising by ₹12,000. Silver prices tumbled by ₹20,000, or nearly 5 per cent, to ₹3,84,500 per kg, after having surged ₹19,500 to a record ₹4,04,500 per kg on Thursday.
On the Multi Commodity Exchange, silver futures crashed as much as 17 per cent to ₹3.32 lakh per kg, while gold futures tanked nearly 9 per cent to ₹1.54 lakh per 10 grams. The fall tracked weak global cues and a rebound in the US dollar.
“Bullion prices saw a reversal on profit-taking, compounded by a broader sell-off across global markets. The session was volatile, with both metals rebounding from intraday lows amid continued profit-taking and President Trump’s imminent nomination of inflation hawk Kevin Warsh as the next Fed chair,” said Kaynat Chainwala, AVP commodity research at Kotak Securities. A tentative deal between Trump and Senate Democrats to avert a US government shutdown also reduced demand for safe-haven assets.
Market participants expect Warsh to adopt a more hawkish stance, potentially strengthening the US dollar and exerting pressure on precious metals.
“This decline was mainly fuelled by heavy liquidation of long positions by large institutional players seeking to secure gains after a strong multi-session advance,” said Saumil Gandhi, senior analyst–commodities at HDFC Securities, adding that dollar recovery intensified the pressure.
Gold and silver exchange-traded funds also witnessed sharp declines in the domestic market.
The swings have reignited debate on whether rising volatility is eroding gold’s traditional safe-haven appeal. Some traders argue that frequent profit-booking has increased volatility in defensive assets. The Basel-based Bank for International Settlements has noted that gold has become more speculative. However, the World Gold Council expects investment demand to remain firm in 2026, citing gold’s role as an all-weather hedge going forward.
