Why Gold and Silver Prices Are Falling?

Mumbai, February 2: Precious metals witnessed a significant sharp decline on Monday, February 2, as both gold and silver prices tumbled to their lowest levels in months. In international markets, gold slid ‌9% to its lowest ‌in more than two weeks, while silver fell more than 13% after both metals hit records last week.

The sell-off was triggered by a combination of a strengthening US Dollar and unexpectedly hawkish signals from global central banks regarding interest rate trajectories. Gold Rate Today, February 02, 2026: Check 22K & 24K Gold Prices in Delhi, Mumbai, Chennai and Other Cities.

Gold and Silver Prices Crash

The crash was felt acutely in India, where gold prices on the Multi Commodity Exchange (MCX) saw a massive intraday drop. Following the global trend and a recent reduction in domestic import duties, 24K gold prices fell by approximately INR 13,410 per 10 grams, bringing the rate to roughly INR 1,47,320 in Delhi. Silver followed suit with a decline of nearly INR 50,000 per kg in the national capital, reflecting the volatility seen in the London and New York trading sessions.

Local jewelers reported a sudden uptick in footfall as retail buyers moved to take advantage of the lower rates. However, investment demand remained cautious as analysts warned that the downward trend could continue if technical support levels are breached further. Silver Rate Today, February 02, 2026: Check Latest Prices of White Metal in Delhi, Mumbai, Chennai, and Other Major Cities.

Factors Behind the Price Drop

Market analysts point to the US Federal Reserve's latest stance as the primary driver of the crash. Recent employment data suggests the U.S. economy remains resilient, reducing the immediate need for aggressive interest rate cuts. As interest rates stay higher for longer, non-yielding assets like gold and silver lose their appeal compared to Treasury bonds and the Dollar.

Additionally, profit-booking by large hedge funds contributed to the momentum. After a prolonged rally in late 2025, many institutional investors chose this morning to liquidate positions, leading to a "cascade effect" across global commodity exchanges.

Silver's steeper decline is being attributed to a slowdown in industrial demand forecasts. As a metal heavily used in solar panels and electronics, silver is sensitive to manufacturing data. Slower industrial growth figures from major economies released this morning pressured silver prices more heavily than gold.

Technical analysts suggest that the next few trading sessions will be crucial. Conversely, some experts view this crash as a necessary market correction that could provide a healthy entry point for long-term investors. For now, the market remains "oversold," and traders are looking toward upcoming inflation data later this week to determine if the precious metals will find a floor or continue their descent.

(The above story first appeared on LatestLY on Feb 02, 2026 03:45 PM IST. For more news and updates on politics, world, sports, entertainment and lifestyle, log on to our website latestly.com).