Gold and Silver Prices Face Heavy Pressure on MCX Amid Global Sell-Off
Gold and silver prices continued to face heavy pressure on the Multi Commodity Exchange (MCX) on Friday, with both metals opening sharply lower as weak global cues and a stronger US dollar dampened market sentiment. This decline marked the second consecutive session of losses, effectively undoing most of the gains achieved during a short-lived rebound earlier in the week. The broader sell-off in global technology stocks contributed to the negative momentum, creating a challenging environment for precious metals.
Sharp Declines in Silver and Gold Futures
Silver futures for March 5 delivery on the MCX experienced the most significant fall, sliding by 6% or Rs 14,628 to settle at Rs 2,29,187 per kilogram. Gold futures for April 2 delivery also slipped, declining by Rs 2,675 or 2% to trade at Rs 1,49,396 per 10 grams. These losses highlight the volatility and bearish sentiment prevailing in the domestic market.
Mixed Movements in International Markets
Internationally, gold prices showed mixed movements. Spot gold edged up by 0.4% to $4,790.80 per ounce as of 0224 GMT, though it remained down by 1.4% on a weekly basis. In contrast, US gold futures for April delivery declined by 1.7% to $4,806.50 per ounce. Silver prices remained largely flat at $71.32 an ounce after suffering a steep 19.1% fall in the previous session. Earlier on Friday, silver had dropped as much as 10%, slipping below the $65 level to hit its lowest point in over one-and-a-half months, indicating severe pressure in the global market.
MCX Implements Additional Margin Hikes
Adding to the volatility, the MCX implemented further margin hikes on precious metal contracts. After raising margins on silver futures by 4.5% and on gold futures by 1% with effect from February 5, the exchange imposed an additional margin of 2.5% on silver futures and 2% on gold futures from Friday. This has taken the total additional margin requirement to 7% for silver futures and 3% for gold futures from February 6 onwards.
Higher margin requirements increase the amount of capital traders need to maintain, often leading to a cutback in speculative and leveraged positions. In volatile markets, this can prompt profit booking or forced unwinding of positions, particularly in silver contracts, thereby exerting further pressure on prices or increasing intraday swings.
Expert Analysis and Market Outlook
Manoj Kumar Jain of Prithvi Finmart told ET that market participants are closely monitoring developments around the US–Iran nuclear deal talks, which could influence the direction of precious metals. He noted that gold and silver are currently witnessing very high price volatility. According to him, silver may find support near $65 per troy ounce, while gold could hold support around $4,440 per troy ounce on a weekly closing basis.
Jain also said volatility is likely to persist during the session due to fluctuations in the dollar index, the partial shutdown in the US, and ongoing geopolitical tensions. He pegged gold’s support levels for the day at $4,770–$4,640 per troy ounce, with resistance at $4,955–$5,050. For silver, support is seen between $71.20 and $64.00, while resistance lies in the $84.40–$88.80 range.
On the MCX, Jain said gold has support at 150,500–147,700 and resistance at 154,200–155,800, while silver is supported at 225,000–212,000 with resistance at 254,000–264,000. He advised investors to stay away from precious metals markets until stability returns, emphasizing the need for caution in such turbulent conditions.
