MUMBAI — The "unstoppable" rally in precious metals met a violent end today, February 5, 2026, as silver and gold prices continued their dramatic tailspin. Investors who were riding the highs of January are now facing a stark reality check: silver has plunged nearly 37% from its recent peak, with domestic markets hitting "lower circuit" limits as panic selling takes hold.
The Crash by the Numbers
The sheer speed of the decline has left retail investors in shock. On the Multi Commodity Exchange (MCX), the carnage was undeniable:
Silver March Futures: Dropped over 8% today alone, struggling to hold the ₹2.45 lakh to ₹2.50 lakh per kg range—a staggering fall from the ₹4.10 lakh peak seen just days ago.
Gold (24K): Slipped below the psychological ₹1.50 lakh per 10 grams mark, falling over ₹5,000 in a single session.
Silver ETFs (SilverBees): Dropped more than 13% in morning trade, with prices hovering around ₹230, down from recent highs of ₹360.
Why the 'Shining Metal' Lost Its Luster
Analysts are pointing to a "triple threat" of factors that turned a correction into a full-blown rout:
The 'Warsh' Effect: US President Trump's nomination of Kevin Warsh as the next Fed Chair has signaled a more hawkish (tighter) monetary policy. Markets now expect slower rate cuts and a stronger US Dollar, which typically crushes gold and silver.
The Margin Squeeze: Global exchanges (CME Group) hiked margin requirements for silver futures. This forced institutional traders to dump their positions to cover costs, triggering a "snowball effect" of liquidations.
The India-US Trade Deal: News of a potential reduction in trade tariffs and a surging Rupee (up by over 119 paise) has dampened the domestic price of imported bullion.
Expert Insight
"Overspeeding leads to a crash, and that is exactly what we are witnessing," says Pranav Mer, VP of Commodity Research at JM Financial. "While the long-term industrial demand for silver in green energy remains, the speculative excess had to be blown off."
What’s Next?
As the market searches for a floor, all eyes are on the upcoming US-Iran nuclear talks in Oman and further signals from the Federal Reserve. For now, the "safe haven" of gold and silver feels anything but safe.
