Silver rate today climbs 6% as investors rush to buy the dip after the crash - Another spike on the way?

Silver rate today on MCX climbed 6% on Wednesday, February 4, extending gains from the previous session as value buying emerged after the metal’s sharp correction from record levels. Gold also extended its recovery.

In the previous session, silver had jumped nearly 15% in intraday trade after the India–U.S. trade announcement, following a steep fall that had pulled prices down more than 46% from the peak within three sessions. Meanwhile, Gold prices had also advanced 6%.

MCX silver rate today jumped 6% to hit an intraday high of ₹2,84,094 per kg. MCX gold too witnessed strong buying, rising 3% to ₹1,58,420 per 10 gram.

In overseas markets as well, spot silver gained 2.1% to $86.90 as risk appetite improved and the US dollar softened. Gold also rose 2.1% in early trade after climbing over 6% in the previous session. By Tuesday’s close, gold was still around 12% below its record high touched on January 29, but remained nearly 15% higher for the year.

Comeback after last week’s selloff

The recovery in precious metal prices since yesterday came after US President Donald Trump announced a new trade arrangement with India. The pact lowers U.S. tariffs on Indian goods to 18% from 50%, while India agreed to restrict Russian oil purchases and ease certain trade barriers.

Even as the deal improved sentiment in domestic gold, silver price, investors continued to assess broader factors such as geopolitical tensions, currency movements, and expectations around US Federal Reserve leadership. Strong retail buying in China ahead of the Lunar New Year had also supported bullion demand, though Chinese markets will remain closed for more than a week from February 16, temporarily removing a key source of demand.

Traders are also watching developments involving Iran after Trump signalled that talks on a potential nuclear agreement could take place soon. Any progress could reduce gold’s safe-haven appeal.

The selloff in precious metals last week began after Trump nominated Kevin Warsh to lead the Federal Reserve, strengthening the dollar. Soon after, CME Group raised margin requirements, forcing leveraged traders to exit positions and deepening the fall.

Another rally coming?

Mirae Asset Mutual fund believes going forward, markets are likely to remain volatile as participants reassess risk, reduce leverage, and wait for clearer signals. For now, the precious metals complex has moved from euphoria to introspection.

"The reset may ultimately prove healthy, but the events of the past few days will stand as a stark reminder: even assets seen as symbols of stability are not immune to excess or to sudden gravity. For now, we maintain a cautious stance on silver following its parabolic move and had suggested trimming overallocation to precious metals to realign portfolios with long term strategic allocation levels While it remains prudent to await greater clarity and trend confirmation, gold appears relatively better positioned on a risk–reward basis," it suggested.

Technical View

Aamir Makda, Commodity & Currency Analyst, Choice Broking noted Silver price has started trading over 50% of Fib. Retracement level which is at 253,468, having pullback towards 38% of Fib. Retracement level placed at 292,928. Breakout of this level will continue the upward move in Silver ahead and next hurdle would be at 341,773.

For gold, he foecasted, "After a recent fall, Gold price has pullback from the 38% of Fib. Retracement level placed at 137,728. Immediate resistance would be at 23% of Fib. Retracement level placed at 154,215. Breakout of this level will boost the upside momentum in Gold price and next resistance would be at 160,000 – 167,000."

Makda is expecting Moderately bullish trend in Gold and Silver ahead in this week.

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.