Gold and silver extended their slide for a third consecutive session on February 2, while commodity-based ETFs fell up to 20%. The decline came after both metals dropped from recent record highs, as investors booked profits and traders unwound positions, triggering broad selling across the market.MCX Silver futures for March 5, 2026, were down Rs 10,000, or 3.7%, to Rs 2,55,652 per 10 grams. Meanwhile, gold futures for April 2, 2026, delivery edged lower by Rs 4,252, or 3%, to Rs 1,43,501 per 10 grams.

In the previous session, MCX Silver futures declined Rs 26,273, or 9%, to close at Rs 2,65,652 per 10 grams, while gold April futures slipped 3%, or Rs 4,592, to Rs 1,47,753 per 10 grams.

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Gold and silver ETFs crash

Zerodha Gold ETF fell 8% to a day’s low of Rs 21.35. Nippon India Gold ETF, the largest fund in the category, dropped 6%, while Aditya Birla Sun Life Gold ETF fell 9%.

Kotak Silver ETF declined 20% to a day’s low of Rs 206. SBI Silver ETF fell up to 19%, and Edelweiss Silver ETF slipped up to 16% during the same period.

The dollar held on to recent gains as investors assessed the potential policy stance of the U.S. Federal Reserve under Kevin Warsh, who is seen as favouring a smaller balance sheet. A firmer dollar typically weighs on gold prices, making the greenback-priced metal more expensive for buyers using other currencies.

In the international market, spot gold slipped 1.5% to $4,793.97 per ounce as of 0046 GMT, after touching a more than one-week low on Friday. The pullback comes a day after bullion scaled a record high of $5,594.82. In contrast, spot silver rose 1.6% to $85.98 per ounce, though it remains well off its all-time high of $121.64 hit on Thursday.

Continuous crash in ETFs

On February 1, silver fell nearly 9%, wiping out Rs 1.35 lakh of its value in just two days, while gold mirrored the weakness, slipping over Rs 31,000 during the same period.

On January 30, silver delivered a stunning reversal on MCX, plunging up to 27%, or Rs 1,07,968, in a single day. This marked its worst-ever crash, dragging prices back below the Rs 3 lakh mark, just a day after the metal had soared to a record high of Rs 4 lakh.

Gold prices also tanked, falling as much as 12% or Rs 20,514 in a single day on January 30, marking their worst one-day rout since March 2013, when prices had plunged 9% on the MCX.

Limit imposed by BSE

Following the historic crash in gold and silver prices, on February 1, BSE imposed a 20% circuit limit on gold and silver ETFs. For the current trading session, ETF prices will be anchored to the previous day’s NAV (T‑1 NAV), with transactions allowed only within a ±20% band. The move aims to curb excessive intraday volatility and protect investors from abrupt price swings.

“In view of the volatility in underlying gold and silver prices, the reference price for gold and silver ETFs traded on the Exchange shall be based on the T‑1 NAV as published by the respective mutual funds/asset management companies. Accordingly, the prescribed price band of ±20% shall apply to the T‑1 NAV for trading purposes,” BSE said in a circular released on February 1.

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What should investors do?

Jigar Trivedi, Senior Research Analyst at IndusInd Securities, said silver tumbled more than 6% to around $79/oz, remaining under pressure as the market continued to reel from Friday’s 26% plunge, its biggest one-day decline ever.

Geopolitical and economic uncertainties, along with concerns about the Fed’s independence, reinforced silver’s safe-haven appeal. Momentum buying further amplified gains, with a wave of purchases from Chinese speculators adding froth to the rally and intensifying the sell-off as they booked profits.

MCX Silver March prices are likely to drop to Rs 2,45,000/kg, as the global sell-off in the metal has yet to ease, Trivedi added.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)

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