The bullion market has witnessed intense volatility over the past few days, leaving investors uncertain about their next move. A sharp correction in gold, silver and copper prices has triggered widespread concern, with many questioning whether this is a buying opportunity or a signal to stay away. Jewellers and traders report a surge in enquiries as prices fall sharply after an extraordinary rally in 2025.
Gold delivered returns of nearly 70 per cent last year, while silver surged by an exceptional 170 per cent. However, the final days of January and the first week of February 2026 have reversed sentiment, catching many investors off guard.
Three Days That Altered the Market Trend
January 29, 2026, marked the peak of the rally, with gold touching an all-time high of ₹1.93 lakh per 10 grams on the MCX, while silver climbed to ₹4.20 lakh per kilogram. Copper also surged, trading near ₹1,480. Investor confidence was strong, driven by the speed of the rally—silver had climbed from ₹3 lakh to ₹4 lakh in just ten days.
The momentum, however, reversed sharply on January 30. Prices turned lower and continued to slide for the next three sessions, unsettling retail investors. A brief recovery attempt on February 2 raised hopes of stabilization, but the rebound failed, and prices resumed their downward trajectory.
Eight Days of Heavy Losses
The decline over the past eight days has been particularly severe. Gold has slipped from its peak of ₹1.93 lakh to around ₹1.40 lakh, while silver has plunged from ₹4.20 lakh to nearly ₹2.25 lakh per kilogram, effectively wiping out almost half its value.
By the close of trade on Friday, gold was trading near ₹1.55 lakh and silver around ₹2.49 lakh. In percentage terms, gold has fallen by approximately 23 per cent, while silver has declined by nearly 46 per cent over this period. Copper has also weakened, registering a fall of about 18 per cent. Investors who entered the market at higher levels have suffered significant portfolio losses.
Key Factors Behind the Decline
Market participants attribute the correction primarily to profit-booking after the sharp rally. As prices reached record levels, long-term investors began locking in gains, increasing selling pressure.
A stronger US dollar has also played a crucial role. Dollar appreciation makes gold and silver more expensive for buyers using other currencies, dampening global demand. Additionally, the appointment of a new Federal Reserve chief in the US and the MCX’s decision to raise trading margins have further weighed on sentiment. Higher margins forced many leveraged traders to exit positions, accelerating the sell-off.
Caution Advised Amid Continued Volatility
Market experts advise against aggressive buying at current levels. Analysts at JPMorgan have warned that silver prices may still be elevated and could face further downside during periods of stress. Despite the correction, long-term fundamentals for precious metals remain intact.
Experts recommend waiting for clear signs of stability before entering the market. Investors willing to take exposure are advised to adopt a staggered investment approach rather than deploying capital in a single transaction, helping reduce risk amid ongoing volatility.
