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Gold and silver prices fell sharply on Budget Day, with futures contracts hitting lower circuit limits in early trade, as profit-booking and technical selling overwhelmed the market during the special trading session on February 1.
The sharp decline came after weeks of strong gains in precious metals, leaving prices vulnerable to a sudden correction.
Gold and silver futures on the Multi-Commodity Exchange dropped up to 8–9% in early trade, triggering automatic lower circuit limits and briefly halting trading. The fall marked one of the steepest single-session declines in recent months.
The sell-off extended to exchange-traded funds linked to bullion, prompting the BSE to tighten circuit filters on gold and silver ETFs to curb volatility.
Market participants said the slide was not driven by any direct announcement in the Union Budget 2026 but by nervous positioning that existed before policy decisions became clear.
Traders had been cautious because they expected changes to import duty rates and fiscal signals, which would affect domestic bullion demand.
The special Sunday trading session also created stronger price movements because diminished market activity increased selling pressure.
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The analysts observed that traders sold their previous metal investments after the market had experienced an extended increase. The recent three weeks have produced the highest gold and silver prices as worldwide political unrest has driven people to acquire secure financial assets. The market experienced a more substantial decline because traders had to liquidate their margin positions after prices began to decrease.
Market movements occurred because of International elements that include which specific elements?
The US dollar gained strength when worldwide bond yields rose because this development made investors lose interest in gold and silver which do not provide any investment returns. The CME Group and other International exchanges had already raised their margin requirements which created additional market difficulties for trading activities.
Market experts expect precious metal prices to follow global market patterns and currency changes and post-Budget policy announcements in the upcoming period of market unpredictability.
