Silver plunges ₹1.36 lakh in two days to ₹2.65 lakh:Gold falls ₹31,000 to ₹1.38 lakh as heavy profit booking triggers drop in prices

Gold and silver prices declined for the second consecutive day on Saturday (February 1) ahead of the Union Budget presentation, with both metals witnessing heavy selling pressure in early trade on the Multi Commodity Exchange (MCX). During morning trading, silver fell by ₹26,000 (around 9%) to ₹2.65 lakh per kg on MCX. Gold also slipped by ₹12,000 (around 8%), with 10 grams trading at ₹1.38 lakh. Sharp fall over two days The latest decline comes after both metals hit record highs earlier this week. Gold has dropped by ₹31,000 in two sessions. On January 29, gold had touched ₹1.69 lakh per 10 grams, but is now trading around ₹1.38 lakh. Silver has fallen sharply by ₹1.36 lakh in two days. It had reached an all-time high of ₹4.01 lakh per kg on January 29, and has now slipped to ₹2.65 lakh per kg. Market participants said the correction follows a strong rally in recent days, with traders booking profits ahead of the budget announcement. 2 main reasons behind the fall Market experts attribute the sharp correction to two key factors: 1) Profit booking after record rally Gold and silver had risen to fresh highs in recent sessions. Following the surge, traders and investors reportedly began large-scale profit booking, triggering selling pressure. 2) Weakening physical demand After prices touched record highs, physical demand softened, and concerns related to industrial consumption (particularly for silver) also increased. Margin hike adds pressure: CME raises margin on gold, silver SEBI-registered commodity expert Anuj Gupta said that after copper, the Chicago Mercantile Exchange (CME) has now increased margin requirements on gold and silver, adding further pressure to prices. Gold margin raised: from 6% to 8% Silver margin raised: from 11% to 15% Experts said prices may remain volatile and under pressure as traders adjust positions following the margin hike. How margin increase impacts prices In commodity markets, traders do not pay the full value of a large deal immediately. Instead, they deposit a portion as security, known as margin. When margin requirements are increased: traders must arrange additional funds, and those unable to deposit extra money may be forced to sell their positions. If selling rises sharply across the market, prices typically decline further. Bullion Market also sees decline; Silver down over ₹40,000 Prices in the physical bullion market also declined, though the fall was comparatively lower than MCX futures. According to the India Bullion and Jewellers Association (IBJA): Silver fell by ₹40,638, now at ₹3,39,350 per kg 24-carat gold fell by ₹9,545, now at ₹1,65,795 per 10 grams Traders said bullion market prices tend to show a smaller drop since the market closes at 5 PM, whereas futures trading continues till 12 AM, with second-by-second price fluctuations. Tips for buying Gold from Jewellers Experts advise customers to follow two key checks while purchasing gold: 1) Buy only certified Gold Buy gold with BIS hallmark certification. The hallmark includes an alphanumeric code (example: AZ4524) confirming purity and caratage. 2) Verify daily prices Cross-check gold rates and weight through reliable sources such as the IBJA website, as prices vary across: 24 carat 22 carat 18 carat 4 ways to identify real Silver Consumers can check silver purity using these common tests: Magnet Test: Pure silver does not stick to magnets. Ice Test: Ice melts quickly on real silver due to high conductivity. Smell Test: Real silver has no smell; fake may smell like copper. Cloth Test: Rubbing with a white cloth may leave a black mark on real silver.