Silver rate today soars over 14% on MCX after a 46% crash from peak on India-US trade deal - Will the rally continue?

Silver rate today rebounded over 14% after India-US trade was was announced after a brutal phase of correction. The selloff had dragged prices down more than 46% from the peak in just three sessions. Gold prices also recovered today.

MCX Silver price today rallied as much as 14.4% to its intra-day high of ₹2,36,261 per kg on Tuesday, February 3. Meanwhile, MCX Gold prices were also up 6.5% at ₹1,53,460 per 10 gram.

A major macro trigger arrived after US President Donald Trump announced a trade agreement with India. The deal cuts US tariffs on Indian goods to 18% from 50%, in exchange for India halting purchases of Russian oil and lowering certain trade barriers. The announcement added a fresh geopolitical dimension to commodity markets already on edge.

Gold also mirrored silver’s recovery action. In international markets, Spot gold jumped as much as 4.2% to trade above $4,855 an ounce after dropping 4.8% in the prior session. The fall extended Friday’s slump, which had been the steepest in more than a decade.

On January 30, spot gold had plunged nearly 10%, marking its sharpest single-day decline since 1983. That drop dragged prices below the psychological $5,000 per ounce mark that had been breached only days earlier, wiping out a significant portion of the year’s gains.

The recovery was not limited to gold and silver. Spot platinum rose 3% to $2,183.64 per ounce after having touched a record $2,918.80 on Jan. 26. Palladium gained 2.7% to $1,765.75, participating in the broader bounce across the precious metals complex.

Silver, Gold prices: Today's recovery and earlier crash

While the sentiments in domestic markets were majorly aided by the India-US trade deal, investors also reassessed geopolitical risks, currency concerns, and the outlook for US monetary leadership. Moreover, heavy buying by Chinese retail investors ahead of the Lunar New Year also aided demand. China’s markets will remain shut for more than a week from Feb. 16 for the holiday break, temporarily removing a major source of demand.

Traders are also closely tracking developments involving Iran after President Trump indicated that discussions around a new nuclear agreement could take place in the coming days. Any diplomatic progress could reduce the safe-haven appeal of gold and weigh on prices.

Meanwhile, the recent selloff in precious metals was initially sparked by Trump’s nomination of Kevin Warsh as the next Federal Reserve chair. The announcement strengthened the dollar, pressuring bullion prices. This was followed by CME Group raising margin requirements for precious metals futures, which forced leveraged traders to unwind positions rapidly. The combination of a stronger dollar and higher trading costs created a sharp liquidity squeeze, accelerating the fall.

Will the Rally continue?

Commodity expert Hareesh V, Head of Commodity Research, Geojit Investments believes longer‑term drivers—geopolitical tensions, central‑bank buying and macro uncertainty—remain intact. These will aid the rise in precious metals.

He further noted that the earlier correction was amplified by extreme overbought conditions after gold and silver touched unprecedented highs just days earlier, with silver having surged more than 60% in a month and gold over 20%. Profit‑taking cascaded into panic selling as liquidity thinned and volatility spiked, added the expert.

“The violent drop was more like a technical correction than a deterioration in core fundamentals,” he explained.

Technical Outlook

On the technical front, Renisha Chainani, Head - Research at Augmont highlighted that historically, periods of strong momentum are often accompanied by sharp but temporary volatility.

"While recent price action has disrupted short-term technical charts, the long-term trend remains constructive. This suggests the current correction is likely a typical “shake-out” within an ongoing long-term bull market for precious metals," Chainani said.

Silver has key support in the $70–72 range. Prices are expected to stabilise near these levels and could rebound toward the $80–82 zone. These dips should be used as a buying opportunity to accumulate atleast 50% of the investment amount for the long-term, advised the expert.

Meanwhile, for Gold, Chainani suggested that dips should be used as a buying opportunity to accumulate atleast 50% of the investment amount for the long-term. On the upside, any rebound is likely to face immediate resistance near the $4,750–4,800 zone.

Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before making any investment decisions.