Metals Take a Hit as Dollar Gains Strength

Gold and silver markets woke up to some turbulence on February 2. Gold prices slipped sharply, pressured by a firmer U.S. dollar and ongoing profit-booking, while silver bounced back after experiencing one of its steepest drops in recent weeks. Traders described the session as a “technical correction” after the metals’ recent rally.

Domestic Prices: Gold Drops, Silver Bounces

On the MCX, the benchmark February gold contract closed at ₹65,050 per 10 grams, down around ₹150–200 from the previous session. In the international market, spot gold hovered near $2,028 per ounce, sliding 0.3%, as investors assessed the dollar’s strength and global economic cues.

Silver saw a more dramatic intraday swing. The March silver contract on MCX rebounded to ₹74,800 per kg, recovering nearly ₹600–700 after plunging in the previous session. This rebound, however, still leaves silver down significantly from its recent highs.

Why Gold Fell: Dollar Strength and Technical Factors

Gold’s dip is primarily linked to a stronger U.S. dollar, which makes bullion more expensive for buyers using other currencies. Analysts noted that market participants were reacting to signals from the Federal Reserve suggesting that rate cuts may not be as aggressive as previously expected.

Adding to the pressure, futures exchanges like CME increased margin requirements for leveraged positions. This forced some traders to reduce positions, contributing to the slide in prices.

• Spot gold: $2,028 per ounce (-0.3%)

• MCX February gold: ₹65,050 per 10g (-₹150–200)

• Dollar index: firm, supporting stronger USD

Silver’s Sharp Drop and Recovery

Silver’s volatility has been more extreme. The metal plunged nearly 31% from its recent peak before clawing back in Wednesday’s session. Its dual role as both a monetary and industrial metal used in electronics, solar panels, and industrial applications—amplifies its swings.

• MCX March silver: ₹74,800 per kg (+₹600–700 intraday rebound)

• Spot silver: $25.40 per ounce (+0.5% intraday recovery)

Traders say the rebound is tentative but reflects value buying at lower levels. Analysts caution that silver’s recovery may be short-lived if the dollar remains strong and global risk sentiment shifts.

Broader Market Context

Precious metals are not moving in isolation. Indian equities, cryptocurrencies, and other risk assets saw heightened volatility alongside bullion, reflecting investor caution. Some market experts described Wednesday’s gold and silver moves as a healthy market reset after overbought conditions.

Key triggers behind the metals’ moves:

1. U.S. dollar strength—gold and silver priced in dollars feel the pinch

2. Margin hikes in futures—leveraged traders reducing positions

3. Profit-booking—recent sharp rallies prompted selling

What Investors Should Watch

• If the dollar weakens, gold could stabilize or even rebound.

• Silver’s industrial demand might support prices if global growth expectations improve.

• Short-term swings are expected; investors should watch MCX levels, intraday ranges, and Fed signals closely.

Quick Snapshot (MCX & Spot)

Markets remain cautious, and while silver shows signs of life, gold is still grappling with a firm dollar. Traders say the next few sessions will be key in deciding whether these metals stabilize or continue to correct.

FAQs: Gold & Silver Market Update – Feb 2, 2026

Q1: Why did gold slip today?
A: Gold dropped mainly due to a stronger U.S. dollar, which makes bullion more expensive for buyers using other currencies. Margin hikes on futures and profit-booking also added pressure.

Q2: Why is silver rebounding after a sharp fall?
A: Silver’s recovery reflects value buying at lower levels. Its industrial demand and smaller market size make it more volatile, so rebounds can be sharper after big drops.

Q3: What were the MCX prices today?
A:

• Gold (Feb 2026): ₹65,050 per 10g (-₹150–200)

• Silver (Mar 2026): ₹74,800 per kg (+₹600–700 rebound)

Q4: How do U.S. Fed signals impact gold and silver?
A: Signals that the Fed may not cut rates aggressively can strengthen the dollar, putting downward pressure on precious metals priced in USD.

Q5: What comes next for investors?
A: Short-term swings are likely:

• If the dollar weakens, gold could stabilize.

• Silver may get support from industrial demand if global growth improves.

• Macro risk aversion could keep metals under pressure.

Q6: Should investors panic?
A: Not necessarily. Analysts see this as a healthy correction after a strong rally. Long-term fundamentals for gold remain intact, but short-term volatility is high.