- Gold and silver prices fell nine percent each on MCX, marking a steep two-day drop
- Budget speculation centers on possible cut in gold import duty from six to four percent
- Jewellers seek relief to boost demand; hike in duty could protect rupee and current account
Gold and silver prices crashed nine percent each on the Multi Commodity Exchange on Sunday, extending one of the most brutal two day sell offs in precious metals history.
The fall has collided with Budget day speculation over import duty changes and left traders searching for signals that could decide whether this correction becomes a buying window or a deeper blow to India's jewellery trade.
MCX gold fell by Rs 13711 to Rs 138634 per ten grams, while silver dropped by Rs 26273 to Rs 265652 per kilogram. The numbers mark a sharper slide than the six percent collapse seen in early trade.
Silver had crashed as much as thirty seven percent intraday on Friday, while global gold prices had plunged twelve percent in the spot market. The fall in gold was the biggest single session drop since the early nineteen eighties and the collapse in silver was the steepest ever recorded.
The deeper tumble overseas happened after Indian equities closed for the weekend, causing a violent gap down on MCX when trading resumed. ETFs now face another round of price resets after losing fifteen to twenty percent on Friday. MCX shares opened nine percent lower as exchange linked volatility spread across the market.
The crash has intensified attention on the Budget, where bullion traders are watching for a move on import duties. Gold and silver bars currently face about six percent basic customs duty and three percent GST, taking the total load to roughly nine percent. This is already lower than earlier years when duty stood near fifteen percent and had fuelled large scale smuggling.
Speculation now centres on whether the Finance Minister will cut duty from six percent to four percent. Such a move could drag domestic gold prices lower by two thousand to three thousand rupees per ten grams and cut silver prices by about six thousand rupees per kilogram if global benchmarks remain steady.
Jewellers want relief to revive demand, while investors want clarity after extreme volatility.
The policy tension remains unresolved. A cut makes bullion cheaper and supports households and exporters. A hike protects the rupee and shields the current account from a surge in gold imports. Traders say this tug of war worsens price swings and explains why global panic has produced such unusually violent moves on MCX.
Choice Wealth said the collapse in gold and silver ETFs is not mysterious and is largely profit taking after Thursday's record highs. It said global panic followed reports of a hawkish Federal Reserve chair pick by President Trump, which strengthened the dollar and crushed overbought metals. The firm advised investors to diversify, stay calm and avoid emotional selling.
Silver continues to sit at the centre of the storm. PL Wealth said its year long rally was built on safe haven demand, tight supply and rising industrial use in solar, electronics and manufacturing. It said silver's historical twenty five to thirty five percent volatility explains the size of the correction and recommended staggered entries instead of lump sum bets.
