A sharp and synchronized sell-off swept through commodity markets on Friday, triggering steep losses across precious and base metals. Gold and silver led the decline, with gold futures locking at a 6% lower circuit on MCX, while silver futures crashed 12%, hitting the lower circuit amid intense selling pressure. The correction extended to industrial metals as aluminium, copper and zinc also recorded heavy intraday losses.
On MCX, gold futures dropped by over Rs 10,000 per 10 grams, snapping a multi-session rally after prices touched record highs earlier this week. Silver witnessed an even more aggressive unwind, sliding nearly Rs 50,000 per kg in a single session as leveraged positions were forced to exit. Silver ETFs mirrored the carnage, with most domestic silver ETFs falling between 12–15%.
Base metals were not spared. Copper futures fell nearly 6%, reflecting risk-off sentiment and profit booking after recent highs. Aluminium futures slipped close to 6%, while zinc declined around 4%, tracking the broader metals sell-off.
The crash was driven by a combination of global profit booking after a parabolic rally, a sharp rebound in the US dollar, and rising speculation that Kevin Warsh may be appointed as the next US Federal Reserve chair. Market participants are pricing in a potentially more hawkish policy stance, which would be negative for non-yielding assets like gold and silver. Elevated leverage across metals amplified the downside as stop-losses were triggered in quick succession.
Analysts said the move highlights how crowded trades can unravel rapidly once sentiment turns. While long-term fundamentals for metals may remain intact, the current phase reflects a painful reset driven by macro uncertainty, tightening financial conditions, and excessive positioning.
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