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MCX Silver Jumps 6% To Hit Upper Circuit After 46% Crash; Can India–US Deal Spark A Sustained Rally?
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Silver prices staged a sharp rebound on Tuesday after an intense phase of liquidation that followed the abrupt unwinding of a record-setting rally
Silver Rates Surge Today
Silver Rates Today: Silver prices staged a sharp rebound on Tuesday after an intense phase of liquidation that followed the abrupt unwinding of a record-setting rally. The earlier sell-off had pulled prices down more than 46% from their peak in just three sessions, highlighting the extreme volatility in the precious metals space. Gold prices also recovered alongside silver.
On the MCX, silver hit the 6% upper circuit at Rs 2,50,436 per kg on February 3, while MCX gold climbed 3% to Rs 1,48,310 per 10 grams.
A key macro catalyst emerged after US President Donald Trump announced a trade agreement with India. The deal lowers US tariffs on Indian goods to 18% from 50% in exchange for India halting Russian oil purchases and easing certain trade barriers. The development added a fresh geopolitical layer to already jittery commodity markets.
Gold mirrored silver’s recovery in global trade. Spot gold rose as much as 4.2% to move above $4,855 an ounce after sliding 4.8% in the previous session. That decline had extended Friday’s slump, the steepest in over a decade.
Earlier, on January 30, spot gold had tumbled nearly 10% in its sharpest single-day fall since 1983, dragging prices back below the $5,000-an-ounce mark that had been crossed only days before and erasing a sizable portion of the year’s gains.
The rebound extended beyond gold and silver. Spot platinum advanced 3% to $2,183.64 an ounce after touching a record $2,918.80 on January 26, while palladium rose 2.7% to $1,765.75, joining the broader recovery across precious metals.
What drove the rebound after the crash?
Domestic sentiment got a lift from the India–US trade deal, while investors also reassessed geopolitical risks, currency movements and the outlook for US monetary leadership. Strong buying from Chinese retail investors ahead of the Lunar New Year further supported demand, although China’s markets are set to shut for over a week from February 16, temporarily sidelining a key source of consumption.
Traders are also watching developments involving Iran after Trump signalled that talks on a potential new nuclear agreement could begin soon. Any diplomatic progress could reduce gold’s safe-haven appeal and cap gains.
The earlier sell-off in bullion was initially triggered by Trump’s nomination of Kevin Warsh as the next Federal Reserve chair, which strengthened the US dollar and pressured metals. The slide intensified after CME Group raised margin requirements for precious metals futures, forcing leveraged traders to unwind positions quickly. A stronger dollar combined with higher trading costs led to a sharp liquidity squeeze, accelerating the fall.
Will the rally sustain?
Hareesh V, Head of Commodity Research at Geojit Investments, said longer-term drivers such as geopolitical tensions, central bank buying and macro uncertainty remain supportive for precious metals.
He noted that the previous correction was magnified by extremely overbought conditions after gold and silver had surged to record highs, with silver rallying more than 60% in a month and gold over 20%. Profit-booking snowballed into panic selling as liquidity thinned and volatility spiked.
“The violent drop was more of a technical correction than a deterioration in core fundamentals,” he said, suggesting that the broader structural support for the metals remains intact.
February 03, 2026, 11:07 IST
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