The sell-off in precious metals intensified on Thursday, with gold and silver prices extending their sharp declines for a second consecutive trading session. A robust US dollar, which makes dollar-denominated assets more expensive for foreign buyers, was the primary catalyst for the drop, triggering profit-booking after a stellar rally in 2025.
Sharp Declines in Domestic and International Markets
On the Multi Commodity Exchange (MCX), the most active gold February futures contract plunged by ₹1,566 to touch a day's low of ₹136,443 per 10 grams. Despite this two-day slump, gold prices still hold a gain of 1.14% in early 2026, following an extraordinary 76.5% surge throughout 2025.
Globally, the spot gold price fell by 1% to $4,407 per troy ounce. The white metal, silver, faced an even steeper correction. MCX silver March futures crashed by ₹12,805 per kilogram to hit ₹237,800, marking a two-day cumulative loss of ₹21,011 per kg. From its record peak of ₹259,322, silver is now down by ₹21,522. Internationally, spot silver prices dropped 4.5% to $74.47 per ounce, a notable retreat from its late-December high of $84.
Expert View: Buy-on-Dips Strategy Still Favoured
Market experts suggest the current dip may present a buying opportunity for long-term investors. Ponmudi R, CEO of Enrich Money, provided technical analysis, stating, “The gold 20-day EMA at ₹1,35,509 continues to act as strong dynamic support, with buyers stepping in consistently on every dip.”
He added that a sustained breakout above ₹1,38,000 could propel prices towards the ₹1,40,000–₹1,42,000 range. For investors, “The preferred accumulation band remains ₹1,36,000–₹1,37,000, with the broader trend clearly favouring a buy-on-dips approach.”
US Dollar Rally on Mixed Economic Signals
The trigger for the precious metals slump was a strengthening US dollar, which rose for the third straight day to reach 98.7. This rally came amidst mixed US economic data that clouded the Federal Reserve's policy outlook. Reports showed US job openings fell more than expected in November, indicating cooling labour demand, while private payroll growth in December was weaker than anticipated.
However, an unexpected improvement in services-sector activity, as per the ISM data, provided some counterbalance. Investors are now keenly awaiting the weekly jobless claims and the crucial December employment report for clearer signals on the health of the US labour market.
Geopolitical Risks and Future Price Forecasts
Geopolitical tensions remain a supportive factor for safe-haven assets like gold. In a recent development, the US seized two Venezuela-linked oil tankers in the Atlantic Ocean, adding to market uncertainties.
Looking ahead, banking giant HSBC, in a Reuters report, forecasts gold could hit $5,000 per ounce in the first half of 2026, driven by geopolitical risks and rising fiscal debts. For silver, HSBC expects it to trade between $58 and $88 in 2026, supported by supply deficits, strong investment demand, and high gold prices. However, the bank also warned of a potential market correction later in the year.
Disclaimer: The views and recommendations expressed are those of individual analysts. Investors are advised to consult certified experts before making any investment decisions.
