Gold and silver are experiencing a significant correction, erasing much of their recent record gains. The big sell-off in gold and silver is largely due to a shift from a rally fueled by global uncertainty and speculative buying.
Gold and Silver fall continue on Monday. In the international market, gold is trading around $4,500, down 7.7%, while silver lost more ground to trade at $72, down by 14%. In the Indian markets, MCX gold futures trade at around Rs 1,40,999, down by 4.57% for the 02APR2026 contracts. The Silver 05MAR2026 contracts trade lower by 13% at Rs 2,30,732.
Gold has lost over $1,100 from its all-time high price, while silver has shed nearly $50 from its all-time high price. As of February 2, Gold is down by 25% from the all-time high price of $5,602.23, while Silver has fallen almost 40% from the all-time high price of $121.
Dollar Strength
One of the prime reasons for the pressure on gold and silver prices is attributed to the strength of the US Dollar. The dollar index is still down over 10% in the last 12-month period, but the announcement of Kevin Warsh’s nomination to be the US Fed chair is providing support to the dollar.
A few days ago, Trump expressed his support for a weak dollar, believing it would benefit exporters. He has also advocated for aggressive rate cuts by the Federal Reserve.
Meanwhile, Warsh, who is opposed to quantitative easing (QE), therefore, it is unclear how things will play out in the coming weeks or months. While news of Warsh’s nomination could have triggered a drop in gold and silver prices, one was long overdue.
COMEX Margins
Further, downside pressure emerged after CME Group increased margin requirements for gold and silver starting Monday. COMEX gold futures margins are raised from 6% to 8%, while COMEX 5000 silver futures (SI) are set to increase to 15% from 11%.
An increase in margin requirements generally leads to traders unwinding their positions. This means that selling pressure increased, leading prices down. Analysts are also seeing leveraged investors facing significant losses, compelling them to liquidate other assets in order to meet margin calls related to their silver and gold investments.
The tailwinds for gold and silver are looking to be still relevant today. Investors are looking forward to a minimum of two interest rate cuts in 2026, which is significant for the market.
Historically, non-yielding bullion, such as gold, tends to perform more favorably in low interest rate environment, making it an attractive option for investors during such periods.