Gold prices witnessed a sharp correction of around 20 per cent over the past two days amid extreme volatility in commodity markets, according to data from the Multi Commodity Exchange (MCX).
Prices continued to slide on Sunday, Budget day, with 24-carat gold on the MCX falling to Rs 1,36,185 per 10 grams. Gold had opened the session at Rs 1,46,800 per 10 grams, reflecting sustained selling pressure and sharp intraday swings.
Gold prices have remained highly volatile in recent sessions. On Saturday, the metal had already come under heavy pressure, closing lower by around 5.4 per cent at Rs 1,69,470 per 10 grams in the domestic commodity market.
Weakness was also evident in global markets, where international gold prices declined by over 9 per cent to USD 4,887 per ounce, further weighing on domestic prices.
Selling pressure extended to silver as well. Silver prices on the MCX declined to Rs 2,65,900, marking a fall of around 9 per cent in a single session on Sunday. The sharp correction followed strong weekly gains recorded over the past two months.
Market experts said a large number of investors had entered gold and silver trades during the recent rally, drawn by sustained price increases. These gains were partly fuelled by leveraged positions that benefited from consistent weekly rises in precious metal prices.
Banking and market expert Ajay Bagga told ANI that the sharp correction on January 29 and 30 would have impacted such leveraged positions.
“Long-term investors, who are largely Indian households, will continue to hold. However, we must keep the discourse measured and avoid leverage, as well as refrain from ‘I told you so’ commentary towards those caught in leveraged trades and now facing unsustainable losses,” Bagga said.
He added that long-term structural factors supporting gold and silver prices — including central bank buying, debasement of fiat currencies, persistent fiscal deficits, and rising industrial demand for silver from electric vehicles, artificial intelligence, and renewable energy sectors — remain intact.
Bagga cautioned that short-term price movements are inherently difficult to predict, noting that the recent decline wiped out nearly two months of gains in just two days, an outcome few had anticipated.
While speculation exists about large institutional activity triggering the fall, experts said such claims remain unverified.
Investors were advised to adopt a measured approach, show restraint in market commentary, and reassess their asset allocation in light of heightened volatility.
Bagga suggested that investors with a 10–15 per cent portfolio allocation to gold and silver may continue to hold, while those uncomfortable with volatility could consider trimming or exiting their positions.
Commodity market downturns can be prolonged, experts noted, but holding assets over a reasonable period may still deliver satisfactory returns, and short-term price fluctuations should not distract investors from long-term financial objectives.
(ANI)
