New Delhi: Precious metals markets were roiled on Sunday as gold and silver prices on the Multi Commodity Exchange (MCX) plunged nine percent each, marking one of the sharpest two-day sell-offs in recent history. The crash coincides with the countdown to Union Budget 2026, intensifying speculation that the government may announce changes in bullion import duties, which could reshape domestic demand.
MCX gold fell by ₹13,711 to ₹1,38,634 per 10 grams, while silver tumbled ₹26,273 to ₹2,65,652 per kilogram, a sharper decline than the six percent slide recorded during early trading. The broader sell-off follows an extraordinary 37% intraday drop in silver on Friday and a 12% plunge in global gold spot prices, representing the steepest single-session losses for these metals in decades. Analysts note that Friday’s global fall was the largest for gold since the early 1980s and the steepest on record for silver.
The overseas sell-off occurred after Indian equity markets closed for the weekend, resulting in a violent gap-down in MCX trading when the market reopened. Exchange-traded funds (ETFs) suffered price resets of 15–20%, and volatility spread across related markets, leaving traders scrambling for signals.
The dramatic slide has heightened attention on import duty policy, a key lever that affects domestic bullion pricing. Currently, gold and silver bars attract a 6% basic customs duty and 3% GST, totaling around 9%, already lower than the near 15% seen in previous years that had fueled smuggling. Market speculation now focuses on whether the finance minister will reduce the customs duty from 6% to 4%, a move that could further depress domestic gold prices by ₹2,000–3,000 per 10 grams and silver by ₹6,000 per kilogram, assuming global benchmarks remain stable.
Jewelers are calling for duty relief to revive consumer demand, while investors seek policy clarity to navigate extreme volatility. Analysts point out that any government decision represents a delicate balance: a cut would make bullion cheaper and support households and exporters, whereas a hike would strengthen the rupee and protect the current account from rising gold imports. This tension contributes to the severe price swings witnessed in recent days.
Financial advisory firm Choice Wealth said the MCX decline largely reflects profit-taking after record highs on Thursday, compounded by a global panic triggered by reports of a hawkish Federal Reserve chair appointment in the U.S., which strengthened the dollar and pressured overbought metals. The firm advised investors to diversify, remain calm, and avoid emotional selling.
Silver, in particular, remains at the center of the storm. PL Wealth noted that its year-long rally was fueled by safe-haven demand, tight supply, and rising industrial usage in solar, electronics, and manufacturing. However, historical volatility of 25–35% explains the size of the correction, prompting analysts to recommend staggered investments rather than lump-sum positions to manage risk.
As the nation awaits Finance Minister Nirmala Sitharaman’s Budget announcements tomorrow, traders are watching closely, weighing whether the sharp correction presents a buying opportunity or signals a deeper downturn in India’s bullion market.