New Delhi | February 3, 2026
The Indian bullion market witnessed a dramatic reversal as gold and silver prices crashed sharply after touching record highs, wiping out massive investor gains within days. While traders initially bet on a weakening dollar and further upside, the market collapsed under heavy selling pressure—triggered by signals from the United States.
According to market experts, the chain of events leading to the crash began days earlier, on January 27, with a key announcement from US President Donald Trump.
Gold, Silver Prices in Delhi on Monday
As per data from the All India Sarafa Association, bullion prices continued to slide .
Silver prices fell ₹52,000 in a single day to ₹2.60 lakh per kilogram, marking the third straight session of sharp losses
Silver has now declined nearly 36% from its January 29 record high
99.9% pure gold dropped ₹12,800 to ₹1,52,700 per 10 grams
The sudden collapse stunned traders who were expecting the rally to continue.
📉 Why Did Gold and Silver Prices Crash?
Market analysts attribute the sharp selloff to a combination of global and domestic factors:
Strengthening of the US dollar
Ongoing tariff negotiations by the Trump administration with multiple countries
Easing geopolitical tensions between the US and Iran
No change in gold and silver import duties in India’s Union Budget 2026–27
Aggressive profit booking in domestic and international markets
However, the biggest trigger came from Washington.
🏛️ How Trump Set the Stage for the Bullion Collapse
On January 27, 2026, the White House made an announcement that sent shockwaves through global financial markets. President Trump formally indicated Kevin Warsh as the next Chairman of the Federal Reserve.
For bullion markets, the message was clear.
Warsh is widely seen as a policy hawk—someone firmly committed to controlling inflation and maintaining a strong US dollar. A stronger dollar typically leads to weaker prices for precious metals, which are priced in dollars globally.
Until then, markets had expected Trump to choose a more “dovish” Fed chair who would favor lower interest rates and easy liquidity. Warsh’s name shattered those expectations overnight.
💥 Panic Selling, Margin Calls Deepen the Fall
As soon as Warsh’s name surfaced, leveraged traders rushed to exit positions. On January 30, silver recorded its largest single-day crash in history, plunging 26% in one session, while gold fell nearly 9%.
At their peaks, gold had surged to $5,600 per ounce and silver to $120 per ounce. The sharp reversal triggered margin calls, forcing traders to liquidate positions across gold, silver, and platinum.
Rising margin requirements poured fuel on the fire, accelerating the selloff.
🔮 What Happens Next?
Despite the brutal correction, long-term optimism remains intact. Global brokerage JPMorgan believes the bullion story is far from over.
According to the firm:
Gold could climb to $6,300 per ounce by year-end, supported by central bank buying and geopolitical risks
Silver is expected to find strong support in the $75–$80 range
That said, analysts caution that volatility will remain elevated, and sharp swings are likely in the near term as markets adjust to tighter monetary expectations.
