Gold prices witnessed a sharp correction in early trade on Monday, February 2, as profit booking accelerated across domestic and global markets.
On the Multi Commodity Exchange (MCX), gold February futures slipped nearly 3% to Rs. 1,38,256 per 10 grams. The decline followed sustained upside in recent sessions, prompting traders to lock in gains. Silver saw even steeper losses, with silver March futures tumbling nearly 6%, to Rs.2,49,713 per kg.
The price of 24K gold declined by Rs. 905 in early trade on Monday, with ten grams of the precious metal trading at Rs. 1,51,530.
The price of 22K gold also decreased by Rs. 830 with ten grams of the yellow metal selling at Rs. 1,38,900.
The price of ten grams of 24K gold stood at Rs. 1,51,530 in Mumbai and Kolkata and Rs. 1,52,180 in Chennai.
In Delhi, the price of ten grams of 24K gold stood at Rs. 1,51,680.
International gold prices also moved lower, with US gold futures (April contract) easing to $4,605.49 per troy ounce.
The downturn comes ahead of revised margin requirements for precious metals derivatives set to take effect on CME platforms.
According to exchange disclosures, gold futures margins for non-high-risk positions will rise to 8% from 6%, while high-risk positions will see margins increase to 8.8% from 6.6%.
For silver, margins are being raised more sharply to 15% from 11% for non-high-risk positions and to 16.5% from 12.1% for high-risk positions.
The markets saw a negative response to the report that Donald Trump is planning to appoint Kevin Warsh as the next Federal Reserve Chair.
Warsh is widely viewed as a hawkish policymaker, raising concerns over tighter monetary conditions.
Analysts observed that gold lost its appeal as a non-yielding asset as investors are anticipating higher interest rates, a firmer US dollar, and Treasury yields being high.
Stronger-than-expected US inflation indicators further reinforced this trend.
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Technically, analysts highlight $4,655 and $4,575 as immediate support levels for gold, with resistance seen near $4,840 and $4,950. Silver support lies at $74.80 and $69.75.
On MCX, Rs. 1,39,650 and Rs. 1,36,310 are key support zones, while resistance is placed at Rs. 1,48,850 and Rs. 1,50,950.
Silver has support at Rs. 2,48,810 and Rs. 2,37,170, while resistance is at Rs. 2,78,810 and Rs. 2,95,470.