Gold and silver prices continued their sharp decline for the third consecutive trading session on Monday, as heavy profit booking by investors put sustained pressure on the precious metals market. The sell-off was driven by a combination of regulatory tightening, weak global cues, and a shift in investor sentiment away from speculative positions.
On the Multi Commodity Exchange (MCX), gold prices witnessed a significant decline. Gold for April 2 delivery was trading at ₹1,38,256 per 10 grams, marking a fall of nearly 3 per cent, or around ₹4,000.
Silver prices saw an even steeper correction. Silver for March 5 delivery dropped by approximately 6 per cent, or nearly ₹16,000, to trade at ₹2,49,713 per kg.
Market participants said the sharp correction reflects aggressive unwinding of long positions after recent highs.
The weakness was not limited to domestic markets and was clearly reflected overseas.
Around 10 am, international gold prices were trading at $4,689.43 per ounce, down 4.20 per cent, or roughly $206.
Silver prices in global markets fell even more sharply, declining 6.51 per cent, or about $5.56, to $79.76 per ounce.
Analysts note that synchronized selling across global exchanges amplified the downward momentum.
Adding to the pressure, the Chicago Mercantile Exchange (CME) announced an increase in margin requirements for gold futures across all risk categories.
Non-heightened risk positions: Margins raised from 6% to 8%
Heightened risk positions: Margins increased from 6.6% to 8.8%
The higher margins mean traders must deploy additional capital to maintain positions, which often leads to forced liquidation during volatile phases.
Margin requirements for silver futures were raised even more aggressively.
Non-heightened risk positions: Increased from 11% to 15%
Heightened risk positions: Raised from 12.1% to 16.5%
Experts believe this sharp hike has directly contributed to the steep fall in silver prices by discouraging leveraged trades.
Market experts attribute the sharp decline in precious metals to multiple overlapping factors:
After a strong rally, investors have rushed to book profits, triggering a wave of selling across both gold and silver.
The CME’s margin hikes are forcing traders to commit more capital, reducing speculative participation and market liquidity.
Unfavourable international market signals and synchronized global selling have added further downside pressure.
The combination of these factors has resulted in one of the sharpest short-term corrections seen in recent weeks.
Analysts caution that volatility in gold and silver prices may continue in the near term as markets adjust to tighter margin norms and reduced speculative activity. Investors are advised to closely track global cues, regulatory developments, and risk appetite before taking fresh positions.