Gold, Silver Plunge: What Drove the Sharp Sell-off on 5 February 2026

The Indian precious metals market experienced a dramatic downturn on February 5, 2026, as both gold and silver prices saw sharp declines, extending a recent volatile trend of "record high, crash, rally, crash." Silver bore the brunt of the sell-off, with its futures tumbling as much as 10% on the MCX, while gold also registered a significant fall, sliding by Rs 2,310 per 10 grams.

Globally, COMEX gold dipped below the $4900/oz mark, falling below $5000, and plunged by 3%. On the domestic front, MCX Gold was seen trading around ₹1.52 lakh, sliding to ₹1.51 lakh per 10 grams at one point. Silver's fall was even more pronounced, crashing 8% globally and plummeting 15% in some international markets. On MCX, silver futures plunged over 7%, bringing prices down to ₹2.5 lakh per kilogram and further to ₹2.44 lakh per kilogram. This widespread slump has left many wondering if the recent rebound in precious metals is truly over.

The primary catalysts behind this sharp decline were a strengthening US Dollar and persistent jitters surrounding the Federal Reserve's monetary policy. A stronger dollar makes dollar-denominated gold more expensive for holders of other currencies, dampening demand. Simultaneously, concerns over potential interest rate hikes by the Fed tend to reduce the appeal of non-yielding assets like gold and silver. This combination sparked a broad-based global sell-off that reverberated across markets, including India.

For Indian investors and jewelry shoppers, the fall meant lower prices for 22K and 24K gold across major cities like Mumbai, Bengaluru, Ahmedabad, Kolkata, and Delhi. Major jewelers such as Tanishq, Kalyan Jewellers, and Malabar Gold would have reflected these reduced rates. This current volatility presents a complex picture for the outlook. Analysts are divided on gold's future trajectory, with some speculating prices could head towards $5645 or even $6300 in 2026, while others question if the yellow metal will fall further below $4917 or manage a comeback. Investors are advised to consider a carefully planned strategy amidst these unpredictable market movements. For jewelry buyers, while the dip offers a potential opportunity, the ongoing uncertainty suggests a cautious approach might be prudent.