Gold and silver prices witnessed a sharp correction on the Multi Commodity Exchange (MCX) on Friday, January 30, after hitting record highs earlier this week. Gold futures fell over 4%, while silver futures slipped more than 5%, mirroring a global pullback in precious metals.
Global profit booking after record highs
The primary trigger behind the fall is aggressive profit booking. Both gold and silver had surged to historic peaks globally and in India over the past few sessions. After such a vertical rally, investors and traders moved swiftly to lock in gains, leading to heavy selling pressure across spot and futures markets.
Stronger dollar weighs on precious metals
The US dollar rebounded from recent lows after stabilising following the Federal Reserve’s policy decision. A firmer dollar typically pressures gold and silver, as these commodities are priced in dollars and become less attractive for non-US investors. This dollar rebound coincided with the sharp correction in metals.
Spillover from global markets
Internationally, spot gold fell around 3.3%, while spot silver dropped about 4.4%, according to ICE data. Silver retreated toward the $110 per ounce level from recent highs near $120, while gold also moved lower after failing to sustain record levels. The MCX reaction was sharper due to India trading at elevated premiums over global benchmarks.
Compression of India premium
Indian gold and silver prices had been trading at unusually high premiums compared with global markets. As global prices cooled, this premium began to compress rapidly, amplifying the downside move on MCX, especially in silver, which is more volatile.
Fed leadership uncertainty adds volatility
Markets are also reacting to comments by Donald Trump, who said he would announce his nominee for the next chair of the Federal Reserve. Reports suggesting former Fed governor Kevin Warsh as a possible pick added to currency and bond market volatility, indirectly impacting precious metals.
Big picture remains strong despite correction
Despite Friday’s sharp fall, silver is still up over 50% in January, marking its strongest monthly performance on record, while gold remains significantly higher on a year-to-date basis. The broader rally has been driven by geopolitical tensions, economic uncertainty, strong investment flows, and tight physical supply. However, after an overheated run, a short-term correction was widely expected.
Disclaimer: Market prices and percentage moves are based on exchange and market data available at the time of writing. Figures may change with live market movements.
