Editor’s Note
This article reports on the sharp decline in gold and silver prices in the domestic commodity market on the day of the 2026 budget announcement. The significant drops highlight the immediate and volatile reaction of precious metals to fiscal policy developments.
On Budget 2026 day, gold and silver wreaked havoc in the domestic commodity market. As soon as the market opened today, a sharp decline was recorded in the prices of both metals. At 9:25 AM, silver was trading down by more than 26,000 rupees or over 9%. Meanwhile, gold prices also weakened by more than 13,000 rupees. On Sunday, February 1, 2026, gold for February contract delivery on the Multi Commodity Exchange (MCX) tumbled by 13,345 rupees or 8.76% to trade at 139,000 rupees per 10 grams. Meanwhile, silver for March contract delivery plunged by 26,273 rupees or 9% to trade at 265,652 rupees per kilogram.
The main reason for the decline in both precious metals is linked to the US currency and derivatives market. After US President Donald Trump nominated former Fed Governor Kevin Warsh for the position of Chairman of the US Federal Reserve, the dollar index rose 0.9% to near 97.15. Trump’s move has reduced demand for safe-haven investments like gold and silver.
The CME Group has increased margins on COMEX gold and silver futures to reduce heavy market volatility. According to information provided by the exchange, margins have been raised for all risk-bearing gold futures categories. For lower-risk positions, the margin has been increased from 6% to 8%. For riskier positions, it has been raised from 6.6% to 8.8%.
In addition, reports of import duty cuts have also dampened investor interest in gold and silver, leading to heavy profit booking. SEBI-registered commodity expert Anuj Gupta said: