On Friday morning trade, silver futures on the MCX collapsed under pressure for the first time in weeks, dropping about ₹24,000 per kilogram, dragging quotes below the psychologically key ₹4 lakh mark. That’s a nearly 6% fall from the recent highs, and it came almost out of nowhere after a torrid rally in the past month.

This isn’t your typical small blip silver had just blasted past ₹4 lakh per kg in recent sessions, surprising traders on the upside as safe‑haven demand took hold. That surge was so strong it became one of the rare times silver outpaced gold in percentage gains.

But today, that blistering run met profit‑taking. Traders who piled in earlier to capture gains were locking in profits, and that selling pressure rippled through the market.

Gold Gives Back Ground Too ₹10,000 Drop/10 g

Gold didn’t escape the correction either. February gold futures on the MCX slid roughly ₹10,000 per 10 grams, about a 6% move lower, bringing prices back down toward levels last seen before this latest spurt higher.

International bullion markets reflected a similar picture gold prices pulled back under pressure from a firmer dollar and strong risk sentiment globally. Still, even after today’s slide, gold is on track for one of its strongest monthly runs in decades.

Why the Sudden Drop? Profit‑Taking and Volatility

Let’s be direct: this wasn’t triggered by some single shocking news event. The pullback looks mostly mechanical traders who bought earlier in the rally seized the opportunity to cash out as prices doubled down. After weeks of continuous gains, markets were due for a breather.

There’s also been a shift in currency dynamics. A firmer US dollar often the enemy of dollar‑priced commodities weighed on bullion, making gold and silver slightly less attractive on the global desk this session.

And geopolitics? It’s still very much in play. Tensions overseas have kept safe‑haven flows alive, but in the short term the sharp upswing means both metals are unusually volatile.

Where Prices Stand Across India

While futures took the headlines, physical markets show the same rhythm. Across major cities:

Gold prices both 22‑ and 24‑carat have retreated, tracking the futures weakness.
Silver merchants report heavier inventory turnover as customers hesitate, waiting to see if prices slide further.

Experts Weigh In: Support, Resistance, and How to Trade It

Market analysts are sounding a cautious tone. According to traders on the ground:

Silver still has technical support down near the ₹3.74 lakh‑₹3.88 lakh zone.
Gold’s cushion sits around ₹1.61 lakh‑₹1.65 lakh per 10 g.

That doesn’t mean prices won’t test lower plenty of volatility remains but the consensus is that this drop is part of a larger chop, not a complete reversal of the multi‑month uptrend.

Is This a Buying Opportunity?

Here’s the real question traders are asking: Buy the dip or lock losses and sit tight?

There’s no universal answer. Some say dips are buying points for longer‑term holders, especially if prices stabilize near technical support. Others are urging caution, saying the market’s thirst for quick gains may dry up as risk assets start to outperform again.

What’s clear? This isn’t a calm pullback. It’s part of a volatile rhythm driven by profit booking after a historic surge meaning anyone contemplating adding exposure should proceed with discipline, clear stop‑losses, and a plan.

Bigger Picture: Imports, Demand and Policy Noise

Beyond day‑to‑day swings, broader structural forces are pressing:

India’s gold and silver import bills have swelled in recent months, prompting debate about raising duties to dampen forex impact.
Investment demand, especially through ETFs, has surged even as jewellery buying softens, a sign that retail and institutional appetite for safe havens isn’t going away.

So the backdrop is still one of strong underlying demand, even if prices wobble in the short run.

Bottom Line: Precious metals just hit turbulence after an extraordinary run. Silver’s plunge below ₹4 lakh/kg and gold’s drop of around ₹10,000 per 10 g look extreme, but they’re part of a larger cycle of profit-taking after steep gains. Whether this is a long‑term entry point or merely a volatile pause depends on your time horizon and tolerance but the landscape has clearly shifted from runaway upside to deep breath and regroup.

FAQs:

Q1: Why did silver drop ₹24,000/kg below ₹4 lakh?
A: The sharp fall is mainly due to profit-taking after a recent rally, combined with a firmer US dollar and increased market volatility.

Q2: Is the gold drop of ₹10,000/10g linked to silver’s fall?
A: Yes, gold often moves in tandem with silver. Global cues, currency movements, and investor sentiment contributed to both metals declining.

Q3: Could this market move continue in the short term?
A: Analysts expect some volatility. Support levels for silver are near ₹3.74–3.88 lakh/kg and for gold around ₹1.61–1.65 lakh/10g, which could stabilize prices temporarily.

Q4: Should investors be concerned about this decline?
A: This is part of a short-term correction after a steep rally. Long-term demand for bullion remains intact, so caution and monitoring are advised rather than panic.

Q5: What are the broader factors affecting gold and silver prices now?
A: Import duties, global economic uncertainty, currency fluctuations, and ETF activity all influence price swings alongside day-to-day market sentiment.