Overall, the recent sharp correction in both gold and silver reflects a debt-induced flush and a reset in sentiment rather than a reversal of the broader trend, says Ponmudi R, CEO of Enrich Money. While short-term volatility may persist due to dollar movements, disciplined buying at lower levels, guided by key support zones and broader channel trends, is expected to shape the next phase of the ongoing secular bull market in 2026.On January 30, domestic gold mirrored the global sell-off, retreating from a high around Rs 1,80,000+ to stabilize around Rs 1,49,500 – Rs 1,49,653, reflecting a similar percentage decline. The contract is trading near the 20-day EMA with the long-term upside channel remaining intact. The key support is in the zone of Rs 1,40,000 – Rs 1,45,000 supported by the firm USD/INR backdrop. A position above Rs 1,40,000 maintains the positive medium-term bias, while a sustained recovery above Rs 1,55,000 in the coming months could fuel momentum towards Rs 1,65,000 – Rs 1,80,000+, supported by domestic tailwinds and structural demand.
Domestic silver witnessed a sharp correction from record highs near Rs 4,20,048 per kg to the range of Rs 2,91,925 – Rs 2,91,000. While volatility remains high, key structural support is seen around Rs 2,91,000, with stronger support placed near the Rs 2,51,000 – Rs 2,52,000 zone, which aligns with the 50-day EMA. Industrial demand remains relatively strong and a sustained move back above Rs 3,00,000 – Rs 3,10,000 could indicate a return in buying interest, potentially pushing prices towards Rs 3,40,000 – Rs 3,50,000 and above amid supply constraints.
Furthermore, CME Group has increased margin requirements on Comex gold and silver futures after prices suffered some of their steepest declines in decades, a move aimed at securing market stability amid increased volatility.
Higher margin requirements tend to have a chilling effect on gold and silver prices, especially in the short term, as they directly affect trader participation and leverage. First, trade becomes more expensive. When exchanges like CME increase margins, traders must post more collateral to maintain the same positions. This often forces highly indebted participants to reduce their exposure or exit their positions altogether.
According to an exchange statement issued on Friday, margins for gold futures under the non-enhanced risk profile will be increased from the current 6% to 8% of the underlying contract value. For positions that fall under the increased risk profile, margins will increase from 6.6% to 8.8%. Silver futures will see even steeper revisions. Margins for non-increased risk positions will increase from 11% to 15%, while those under the increased risk category will increase from 12.1% to 16.5%. The exchange also announced margin increases for platinum and palladium futures, reflecting broader precious metals volatility. The revised margin requirements will come into effect from Monday’s close.
Despite the sharp pullback, the broader bullish outlook for gold and silver heading into 2026 remains intact, experts say. Key structural factors continue to support the trend, including central banks’ continued accumulation of gold and silver supply constraints amid rising industrial demand from sectors such as green energy, electric vehicles, artificial intelligence, electronics and solar. Lingering geopolitical uncertainties and the push for diversification away from fiat currencies also continue to support sentiment.
Also Read: CME Boosts Gold and Silver Margins After Steepest One-Day Drop in Decades
The recent correction is widely seen as a healthy reset that has helped clear excess debt, speculative froth and overbought conditions, creating room for more sustainable upside potential once sentiment stabilizes and buying interest returns at lower levels.
(Disclaimer: Recommendations, suggestions, views and opinions expressed by the experts are their own. These do not represent the views of The Economic Times)
#Gold #Silver #Suffer #Worst #Defeat #Budget #Whats #Ahead #Prices