Gold, silver outlook remains bright, but leverage proved brutal for retail investors: Pravesh Jain
Gold and silver had surged to all-time peaks in January 2026, driven by geopolitical risks and expectations of easier global monetary policy. However, profit booking and tighter financial conditions have triggered a steep correction.
- Feb 17, 2026,
- Updated Feb 17, 2026 5:08 PM IST
Gold prices extended their decline in domestic futures trading on Tuesday as easing geopolitical tensions and a stronger US dollar reduced safe-haven demand. The yellow metal fell more than 1% to around Rs 1.52 lakh per 10 grams on the Multi Commodity Exchange (MCX), tracking weakness in global bullion prices.
MCX data showed gold contracts for April delivery sliding by Rs 2,228, or 1.44%, to Rs 1,52,532 per 10 grams, with a business turnover of 7,553 lots. The decline comes amid improving geopolitical sentiment following signs of easing tensions involving Iran and Russia, which had earlier supported safe-haven buying. A firm dollar and reduced expectations of near-term US interest rate cuts also weighed on precious metals.
Market participants said the recent fall marks a sharp reversal from record highs seen earlier this year. Gold and silver had surged to all-time peaks in January 2026, driven by geopolitical risks and expectations of easier global monetary policy. However, profit booking and tighter financial conditions have triggered a steep correction.
“Gold and silver crashed sharply from their January 2026 record highs due to profit-booking, a firmer US dollar and fading hopes of rate cuts,” said Pravesh Jain, owner at Paras Foundation. He noted that gold has slipped from around Rs 1.59 lakh per 10 grams to the Rs 1.53–1.55 lakh range, while silver has seen a much sharper correction, falling over 20–35% in recent weeks to trade near Rs 2.35 lakh per kg.
Jain also pointed to repeated margin hikes by the MCX, particularly an additional 7% margin on silver futures, which triggered cascading margin calls in highly leveraged futures and options positions. “Small retail traders faced auto square-offs and wipeouts, while mid-sized investors were forced to top up margins or exit at losses. Only large players with deep pockets have been able to absorb the volatility,” he said.
Despite near-term pressure, Jain remains constructive on the long-term outlook for precious metals. “The future of gold and silver is very bright. Physical holders have nothing to worry about, but F&O players must be cautious. Global forecasts suggest gold could reach Rs 5 lakh per 10 grams and silver Rs 7.5 lakh per kg by 2030,” he added.
What's behind the fall
According to analysts, the recent decline in gold and silver prices can largely be attributed to thinner trading conditions, as key Asian markets -- including China, Hong Kong, Singapore, Taiwan and South Korea -- remained closed for Lunar New Year holidays, while U.S. markets were shut for Presidents’ Day. The subdued global participation reduced liquidity and amplified price swings.
Adding to the pressure was a stronger U.S. dollar, with the dollar index rising about 0.3%, making gold costlier for investors holding other currencies. At the same time, easing geopolitical tensions curtailed safe-haven demand for bullion, further weighing on prices.
How to tread this phase
Market participants remain divided on whether the correction will deepen. Analysts note that the recent fall appears to be driven more by temporary factors such as holiday-thinned volumes and profit-taking rather than a fundamental shift in the outlook. The next directional move is expected to depend on inflation trends, economic growth signals and, most importantly, the US Federal Reserve’s policy stance.
Precious metals typically come under pressure when interest rates remain elevated, as they do not offer yield. However, expectations of rate cuts in the coming months could revive investment demand, helping prices stabilise or rebound.
Jateen Trivedi, vice president – research analyst (commodity and currency) at LKP Securities, said gold traded weak below Rs 1,53,500, falling around Rs 1,500, as CME gold slipped below $4,950, down about $57 or 1.15%. “Easing geopolitical tensions reduced safe-haven demand. In the absence of major economic data from the U.S. or China this week, gold may remain in a range-to-weak bias. Immediate support is seen near Rs 1,48,000–1,49,500, while Rs 1,55,000 remains a key resistance zone,” he said.
Aksha Kamboj, vice president of the India Bullion & Jewellers Association and executive chairperson of Aspect Global Ventures, said gold is easing marginally but still trades above last week’s levels. “The broader trend remains supportive, with safe-haven demand intact despite temporary profit-booking. This appears to be a phase of consolidation rather than a trend reversal,” she said.
On silver, Kamboj noted that prices are extending their correction after a strong rally in recent weeks. “The sharper pullback reflects silver’s higher volatility and sensitivity to industrial sentiment. Even so, prices remain above last week’s levels, indicating that the broader trend continues to hold,” she added.
Gold prices extended their decline in domestic futures trading on Tuesday as easing geopolitical tensions and a stronger US dollar reduced safe-haven demand. The yellow metal fell more than 1% to around Rs 1.52 lakh per 10 grams on the Multi Commodity Exchange (MCX), tracking weakness in global bullion prices.
MCX data showed gold contracts for April delivery sliding by Rs 2,228, or 1.44%, to Rs 1,52,532 per 10 grams, with a business turnover of 7,553 lots. The decline comes amid improving geopolitical sentiment following signs of easing tensions involving Iran and Russia, which had earlier supported safe-haven buying. A firm dollar and reduced expectations of near-term US interest rate cuts also weighed on precious metals.
Market participants said the recent fall marks a sharp reversal from record highs seen earlier this year. Gold and silver had surged to all-time peaks in January 2026, driven by geopolitical risks and expectations of easier global monetary policy. However, profit booking and tighter financial conditions have triggered a steep correction.
“Gold and silver crashed sharply from their January 2026 record highs due to profit-booking, a firmer US dollar and fading hopes of rate cuts,” said Pravesh Jain, owner at Paras Foundation. He noted that gold has slipped from around Rs 1.59 lakh per 10 grams to the Rs 1.53–1.55 lakh range, while silver has seen a much sharper correction, falling over 20–35% in recent weeks to trade near Rs 2.35 lakh per kg.
Jain also pointed to repeated margin hikes by the MCX, particularly an additional 7% margin on silver futures, which triggered cascading margin calls in highly leveraged futures and options positions. “Small retail traders faced auto square-offs and wipeouts, while mid-sized investors were forced to top up margins or exit at losses. Only large players with deep pockets have been able to absorb the volatility,” he said.
Despite near-term pressure, Jain remains constructive on the long-term outlook for precious metals. “The future of gold and silver is very bright. Physical holders have nothing to worry about, but F&O players must be cautious. Global forecasts suggest gold could reach Rs 5 lakh per 10 grams and silver Rs 7.5 lakh per kg by 2030,” he added.
What's behind the fall
According to analysts, the recent decline in gold and silver prices can largely be attributed to thinner trading conditions, as key Asian markets -- including China, Hong Kong, Singapore, Taiwan and South Korea -- remained closed for Lunar New Year holidays, while U.S. markets were shut for Presidents’ Day. The subdued global participation reduced liquidity and amplified price swings.
Adding to the pressure was a stronger U.S. dollar, with the dollar index rising about 0.3%, making gold costlier for investors holding other currencies. At the same time, easing geopolitical tensions curtailed safe-haven demand for bullion, further weighing on prices.
How to tread this phase
Market participants remain divided on whether the correction will deepen. Analysts note that the recent fall appears to be driven more by temporary factors such as holiday-thinned volumes and profit-taking rather than a fundamental shift in the outlook. The next directional move is expected to depend on inflation trends, economic growth signals and, most importantly, the US Federal Reserve’s policy stance.
Precious metals typically come under pressure when interest rates remain elevated, as they do not offer yield. However, expectations of rate cuts in the coming months could revive investment demand, helping prices stabilise or rebound.
Jateen Trivedi, vice president – research analyst (commodity and currency) at LKP Securities, said gold traded weak below Rs 1,53,500, falling around Rs 1,500, as CME gold slipped below $4,950, down about $57 or 1.15%. “Easing geopolitical tensions reduced safe-haven demand. In the absence of major economic data from the U.S. or China this week, gold may remain in a range-to-weak bias. Immediate support is seen near Rs 1,48,000–1,49,500, while Rs 1,55,000 remains a key resistance zone,” he said.
Aksha Kamboj, vice president of the India Bullion & Jewellers Association and executive chairperson of Aspect Global Ventures, said gold is easing marginally but still trades above last week’s levels. “The broader trend remains supportive, with safe-haven demand intact despite temporary profit-booking. This appears to be a phase of consolidation rather than a trend reversal,” she said.
On silver, Kamboj noted that prices are extending their correction after a strong rally in recent weeks. “The sharper pullback reflects silver’s higher volatility and sensitivity to industrial sentiment. Even so, prices remain above last week’s levels, indicating that the broader trend continues to hold,” she added.