Gold, Silver Crash to Lower Circuit as Dollar Surge Triggers Panic Selloff

What Happened

Gold and silver prices witnessed a sharp collapse on domestic and global markets, crashing to lower circuit levels on the Multi Commodity Exchange. Silver tumbled as much as 12 percent while gold fell nearly 9 percent, erasing weeks of gains in a single stroke as aggressive profit booking and forced unwinding of leveraged positions dominated trade.

Why Prices Fell

The selloff was driven by a combination of stretched valuations after a record-breaking rally, a sharp rise in the US dollar, and shifting expectations around US monetary policy. Market sentiment turned risk-off after US President Donald Trump signalled his intent to nominate Kevin Warsh as the next chair of the Federal Reserve, a move seen as hawkish on inflation and negative for rate cuts. As bond yields firmed and the dollar strengthened, safe-haven demand for bullion weakened rapidly.

MCX and Global Impact

On Multi Commodity Exchange, silver futures hit the lower circuit after consecutive sessions of steep losses, while gold contracts slid sharply amid extreme volatility. Internationally, spot gold dropped over 3 percent in a single session after touching recent highs, confirming that the correction was global rather than India-specific.

Budget and Policy Angle

The Union Budget provided no fresh trigger for bullion, with no changes in import duties on gold and silver. With policy signals largely neutral, traders focused instead on macro cues, including upcoming US employment data and PMI readings, as well as the stance of the Reserve Bank of India on liquidity and currency stability.

What Comes Next

Despite the brutal correction, several market participants believe the broader long-term trend for precious metals remains intact, supported by central bank buying, fiscal stress in major economies and industrial demand for silver from EVs, AI and renewable energy. However, in the near term, volatility is expected to stay elevated, with further panic-led selling possible before prices stabilise.

The Takeaway

The gold-silver crash is a reminder that crowded trades unwind fast when sentiment turns. When leverage meets uncertainty, even safe havens bleed.