Gold, Silver Rates Recover After Budget Announcements; Will MCX Gold & Silver Prices Crash Or Rise Ahead?

Gold rates and silver rates in India recovered after the Union Budget 2026 announcement on February 1, in a special live trading session at MCX. Gold futures ended in green and above Rs 1.48 lakh mark, while MCX silver futures paused around Rs 2.65 lakh per 1Kg, which flat compared to the previous session.

During the Budget, market participants had widely predicted an import duty cut in gold and silver alongside rationalisation in GST rates and export incentives to support demand for gems & jewellery.

Although, Finance Minister Nirmala Sitharaman did not announce any changes to customs duty and GST rates, she did propose to exempt capital gains tax to drive demand for sovereign gold bonds.

From their peak, gold has corrected by around 20% and silver took most beating to the tune of 36% to 40% drop. That being said, in the upcoming trading sessions between February 2nd to February 6th, gold and silver rates are expected to trade volatile. The next big event is RBI's monetary policy which is the last policy for FY26.

Gold Rates In India:

On a wider scale, gold rates in India stood at Rs 1,60,580 per 10 grams in 24 carat, while the prices were at Rs 1,47,200 and Rs 1,20,440 per 10 grams in 22 carat and 18 carat. At jewellery stores, prices remained unchanged.

But at MCX, gold saw an intense roller coaster-like performance. In the early deals of February 1, gold crashed by around 9% and the price even slipped below Rs 1.40 lakh mark. However, in the second half of the session, gold recovered some heavy losses.

After the closing, MCX gold with February 2026 expiry, stood at Rs 1,43,000 per 10 grams, up by Rs 783 or 0.6%. For the April 2026 expiry, gold futures closed at Rs 1,48,104 per 10 grams, higher by Rs 351 or 0.24%.

Silver Rates In India:

Just like gold, silver rates across stores in India stood unchanged on Sunday. The price of 1Kg silver was at Rs 3,50,000, while 100 grams and 10 grams silver rates stood at Rs 35,000 and Rs 3,500 respectively.

At MCX, silver futures also recovered their losses after crashing by over 9% before Budget announcement. After market hours, MCX silver with March 2026 expiry stood at Rs 2,80,044 per 1Kg, which is flat.

Gold & Silver Prices Outlook Ahead:

According to Jateen Trivedi, VP Research Analyst - Commodity and Currency, LKP Securities, the Union Budget FY27 kept markets on edge as the fiscal deficit target was pegged at 4.3%, while STT on futures was raised to 0.05% and on options to 0.15%, a move that is likely to dent participation in F&O.

However, he also pointed out that there was no update on import duty for bullion, and with sharp weakness already seen in CME on Friday, domestic gold and silver reacted negatively.

Gold has corrected nearly 20% from its peak of Rs1,82,500 to around Rs1,47,800, while silver has seen a much sharper 36% decline from Rs4,20,000 to near Rs2,65,650.

Going ahead, Trivedi said, gold is expected to remain volatile but relatively more stable compared to silver, which may continue to witness exaggerated swings. In the current phase, caution is advisable - a watch-and-learn approach is better until volatility subsides and price structures stabilize.

Furthermore, Kaynat Chainwala, AVP Commodity Research, Kotak Securities said that the currently, globally, further downside pressure may emerge at the start of the week as higher CME margins take effect on Monday, February 2. According to an exchange statement released late Friday, gold margins will rise to 8% from 6% for non-heightened risk profiles, and to 8.8% from 6.6% for heightened risk profiles. Silver margins will increase to 15% from 11% for non-heightened risk profiles, and to 16.5% from 12.1% for heightened risk profiles.

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