Gold, silver tumble 4%: Profit booking drags gold, silver down from record highs, ETFs bleeds

Gold and silver prices witnessed a sharp reversal on the Multi Commodity Exchange (MCX) on Friday, retreating up to 4% in early trade after scaling record highs in the previous session. The steep correction spilled over into exchange-traded funds (ETFs) linked to precious metals, which plunged as investors rushed to book profits following one of the strongest rallies seen in recent years.

MCX gold April futures opened 1.88% lower at Rs 1,80,499 per 10 grams, compared with the previous close of Rs 1,83,962. The yellow metal had surged to an all-time high of Rs 1,93,096 per 10 grams on Thursday before succumbing to selling pressure. Silver prices fell even more sharply, with MCX silver opening nearly 4% lower at Rs 3,83,898 per kg against the previous close of Rs 3,99,893. Silver had touched a fresh peak of Rs 4,20,048 per kg in the previous session.

The domestic correction mirrored brutal losses in global markets. Spot silver slid 5.7% to $109.55 an ounce after hitting a record high of $121.64 on Thursday, while spot gold fell 3.9% to $5,183.21 per ounce, after plunging as much as 5% intraday from its record high of $5,594.82.

The sharp pullback triggered heavy selling across gold and silver ETFs in India. Nippon India ETF Gold BeES, which has delivered returns of over 104% in the past year, dropped nearly 10% to trade around Rs 132. ICICI Prudential Gold ETF fell close to 10%, while Axis Gold ETF declined around 9%. Other funds such as UTI Gold ETF, HDFC Gold ETF, Edelweiss Gold ETF, Quantum Gold ETF and DSP Gold ETF also registered significant losses.

Silver ETFs saw even steeper declines. Mirae Asset Silver ETF slipped about 13%, while Motilal Oswal Silver ETF fell around 12.5% to Rs 330.01. HDFC Silver ETF and Nippon India Silver ETF plunged more than 14% each. Aditya Birla Sun Life Silver ETF, Groww Silver ETF, ICICI Prudential Silver ETF, Axis Silver ETF, UTI Silver ETF, Tata Silver ETF and Kotak Silver ETF also traded sharply lower.

What triggered the selloff

The correction in precious metals was driven largely by global cues, particularly speculation around a potential shift in US monetary policy leadership. US President Donald Trump said he plans to announce his nominee to replace Federal Reserve Chair Jerome Powell on Friday, as Powell is set to step down in May. This fuelled speculation that the next Fed chief could adopt a more hawkish stance.

“So, a potentially less dovish Fed Chairman pick, a rebound in the dollar and gold giving way to overbought conditions have contributed to the decline in the price of the precious metal,” Reuters quoted KCM Chief Trade Analyst Tim Waterer as saying.

The uncertainty sparked a rebound in the US dollar, adding pressure on dollar-denominated commodities. The dollar index rose 0.4% to 96.60, trimming its weekly decline to 0.9%. Against the Swiss franc, the dollar strengthened 0.7% to 0.7699.

Market outlook remains constructive

Despite the sharp correction, analysts say the broader trend for gold remains bullish. Ponmudi R, CEO of Enrich Money, noted that MCX gold futures are trading within a wide Rs 1,63,000–Rs 1,80,500 range after marking fresh all-time highs near Rs 1,80,779.

“The broader structure remains firmly bullish, though the market is witnessing fast intraday swings due to short-term overheating and tactical profit booking,” he said. According to him, the Rs 1,57,000–1,59,000 zone continues to act as strong support, while a sustained move above Rs 1,68,000 could revive upside momentum toward Rs 1,74,000–1,77,000.

Silver’s long-term shine intact

Silver, too, continues to enjoy strong structural support despite Friday’s selloff. The metal has extended its winning streak to nine consecutive months and is on track for its best monthly performance on record.

“Silver fell about 4% toward $110 per ounce as investors locked in profits following the record rally, while a rebound in the dollar added pressure,” said Jigar Trivedi, Senior Research Analyst at IndusInd Securities. “Despite the pullback, silver is still poised to gain over 50% in January.”

Trivedi added that silver’s rally has been driven by persistent geopolitical and economic uncertainties, a weaker dollar, and tight physical market conditions, with both industrial and investment demand at record levels.

Ponmudi R said MCX silver futures remain decisively bullish, with Rs 3,55,000–3,60,000 acting as a critical base. Immediate resistance lies near Rs 4,15,000–4,20,000, while dips continue to offer accumulation opportunities for long-term participants despite heightened volatility in the near term.