Gold is trading around $5,100 per ounce on Friday, down by over 5%. From an all-time high of 5602.23, gold has already fallen by 9%. Silver is trading at $103, down 12% from the previous day’s close and 15% down from the all-time high price of $121.
The parabolic rise in any asset class often leads to an equally sharp correction. This happened yesterday when the fast and furious rally in gold and silver hit a speed bump on Thursday. Gold crashed $380, or about 7%, in just 28 minutes, and silver prices dropped 11% within the same period, causing a quick selloff.
Nearly $5.9 trillion was wiped out from the Gold and Silver markets, but on Friday, $2.5 trillion was added back. This is the peak-level volatility that is happening in the precious metal market, currently.
In the Indian markets, MCX Gold futures trade lower nearly3%, with the LTP of 02 APR 2026 contract at Rs 1,78,563.
MCX Silver futures trade lower by over 7$, with the LTP of 05 MAR 2026 contract at Rs 3,71,556.
Over the last 12 months, gold has been up by 87%, while the YTD return is 20%. Over the last 12 months, silver has been up by 263%, while the YTD return is 46%.
Why are Prices Falling
Gold dipped for the first time in nearly two weeks. One of the big reasons for the gold and silver to witness a sharp correction could be the rally in US Dollar.
Meanwhile, the threat of another US government shutdown was averted as Trump and Senate Democrats reached a tentative agreement. The White House is still negotiating with Democrats about imposing additional restrictions on immigration raids, which have sparked a national outcry.
This action by Trump may have indicated to the market that economic conditions are improving, potentially mitigating earlier negative forecasts.
US dollar rallied following reports that the Trump administration is ready to name Kevin Warsh as Federal Reserve head. President Donald Trump is set to nominate Warsh as Fed chair, according to Bloomberg News. Warsh, known for his inflation hawk stance, has recently supported lower interest rates in alignment with the president. Trump plans to announce the nominee on Friday morning US time. However, with Warsh at the helm, gold prices may receive additional support as the reduced interest rate regime boosts metal prices.
Outlook
The major factors leading to the rally in gold and silver are still relevant. The dollar index is down by 10% over the last 12 months and Trump has voiced his opinion in favour of a weak dollar. The geopolitical and tariff-induced global economic outlook has not changed much. The US Fed is likely to cut rates in the year ahead, at least once, as per the projections by Fed officials. The supply constraints in the silver market continue to influence prices globally. All these points point to an uptrend in gold and silver prices until one or more of these events change the course.
The Economic Survey 2025-26, presented by Union Finance Minister Nirmala Sitharaman on January 29, 2026, also carries a similar view. The Survey indicates that gold and silver prices are likely to rise due to sustained demand as safe-haven investments amidst global uncertainties, unless there is a resolution to peace and trade disputes.