Gold, silver and copper futures hit the 6% lower circuit simultaneously on the Multi Commodity Exchange (MCX) during the special Budget Day trading session on Sunday, February 1, marking one of the sharpest single-session selloffs across metals in recent years.
On MCX, gold futures fell to around Rs 1,40,674 per 10 grams, silver futures slipped to nearly Rs 2,74,410 per kg, while copper futures dropped to about Rs 1,215.60 per kg, with all three contracts locking at the lower circuit shortly after opening.
The sharp decline comes on the back of a global metals rout on Friday, when prices tumbled after hitting record highs earlier in the week. Investors moved swiftly to book profits, as expectations of aggressive U.S. interest rate cuts began to fade and the US dollar stabilised.
Sentiment turned cautious after US President Donald Trump announced the nomination of former Federal Reserve Governor Kevin Warsh as the next Fed Chair. Markets interpreted the move as a signal of a more policy-conservative Federal Reserve, pushing the dollar higher and pressuring dollar-denominated commodities.
Gold and silver, which had surged 17% and 39% respectively in January, were described by analysts as overcrowded and highly speculative, making them vulnerable to a sharp correction once momentum reversed. Silver, in particular, saw outsized losses due to higher leverage and thinner liquidity. Copper, after touching an all-time high globally, also came under pressure amid profit-taking and concerns over demand ahead of the China Lunar New Year holiday.
The Budget Day crash highlights how quickly sentiment can flip in commodity markets after parabolic rallies, with profit booking, dollar strength, leverage unwinding and thin liquidity combining to trigger circuit-level declines across precious and industrial metals.
