Editor’s Note
This article highlights the recent sharp sell-off in commodity markets, particularly silver, driven by a “perfect storm” of factors including a strong US dollar and shifting rate expectations. The dramatic price drop underscores the impact of waning industrial demand at peak price levels.
Commodity markets have faced a “perfect storm,” including a strengthening US dollar and shifting expectations for US interest rates. Silver stole the headlines with a dramatic 10 percent drop on the MCX, falling from over ₹26,850 per kilogram to around ₹2,42,000. Internationally, COMEX silver fell by up to 16 percent in early trading, touching a low of $73.38 per ounce. A sharp decline in industrial interest at peak price levels, combined with a wave of profit-taking by speculative investors, triggered the sell-off.
Although gold was initially tracking the downward trend, it fell to an intraday low of ₹1,48,455 but staged a significant recovery later in the session. Buyers stepped in to reclaim the ₹1,53,000 level, indicating that the yellow metal remains a preferred safe haven during times of broader market turmoil. Domestically, gold recovered nearly 4 percent from its lows as investors used this dip as a technical correction to re-establish long-term positions amid persistent economic uncertainties.
Market perception has been heavily impacted by the nomination of Kevin Warsh as the next Fed Chair. Seen as a policy hawk, his potential leadership has prompted traders to price in a slower pace of rate cuts and a smaller Fed balance sheet, which has given the US dollar a “new lease on life.” The US Dollar Index (DXY) climbed to 97.74, acting as a major headwind for all dollar-denominated assets and reducing the immediate appeal of precious metals for international buyers.
For the first time since the November 2024 US election, Bitcoin has recorded a decline below the significant $70,000 threshold. After reaching a staggering high of $126,000 in October 2025, the world’s largest cryptocurrency is now trading nearly 40 percent below its record peak. The recent drop to $69,821 was driven by a broad risk-off sentiment in US tech stocks, which spilled over into the crypto sector as investors retreated from highly volatile assets.
The moves in both bullion and crypto were amplified by waves of forced liquidations and rising trading barriers. On the MCX, margin increases (4.5 percent for silver and 1 percent for gold) forced many retail traders to either add additional collateral or exit their positions, fueling a downward spiral. In the crypto market, data shows over $2 billion in long and short positions were liquidated this week alone. Investors are now closely watching the upcoming US non-farm payroll data to determine whether this is a healthy consolidation or the start of a deeper structural reversal.