Gold and silver prices extended their sharp decline on the Multi Commodity Exchange (MCX) on Sunday, February 1, as the precious metals market remained under pressure during the special trading session held for the presentation of Union Budget 2026. The sell-off follows intense profit-booking and a surge in the US dollar, which has dampened investor sentiment.

At mid-morning, MCX gold was trading sharply lower, while silver slipped close to double-digit losses, continuing Friday’s historic crash. With international commodity markets closed, global cues remain absent, leaving domestic factors—particularly Budget-related announcements—to drive price action. Any changes in import duties or taxation on precious metals could have an immediate impact on domestic prices.

Friday witnessed extreme volatility, with silver recording its steepest ever single-day fall after dropping from record highs. Gold also suffered its worst one-day decline in over a decade, reflecting aggressive unwinding of leveraged positions.

The sharp correction was triggered after news related to the US Federal Reserve strengthened the US dollar, which crossed key levels. A stronger dollar typically pressures gold prices by making the metal costlier for global buyers, leading to reduced demand.

From a technical perspective, analysts note that both gold and silver have entered a highly volatile phase. Gold futures have slipped towards crucial support zones, and failure to hold these levels could invite further downside. Silver has shown signs of panic selling after a blow-off top, with key supports now being closely watched.

Despite near-term weakness, experts maintain that the long-term outlook for gold and silver remains constructive, supported by central bank buying, geopolitical uncertainty and strong industrial demand for silver. Investors are advised to remain cautious in the short term and monitor price stability before taking fresh positions.