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What is the story about?
Gold and silver prices on the Multi Commodity Exchange (MCX) surged sharply in morning trade on Wednesday (February 4), driven by firm global cues, a softer US dollar and renewed domestic buying after a steep correction in recent sessions.
MCX gold April contracts climbed nearly ₹7,000, or about 4.5%, to ₹1.60 lakh per 10 grams, while MCX silver March contracts jumped more than ₹16,000, or around 6%, to ₹2.84 lakh per kg. Traders said the rally reflected a mix of value buying, short covering and improved sentiment in international markets.
Globally, spot gold rose over 2% on Wednesday (February 2) as the dollar retreated against major currencies, making bullion more attractive to overseas buyers. Silver also outperformed, tracking both precious-metal strength and broader risk-on sentiment.
Why prices rebounded sharply
According to Manav Modi, Commodities Analyst at Motilal Oswal Financial Services, gold and silver had fallen sharply in the previous three sessions — with gold correcting nearly 15% — which triggered bargain hunting once prices stabilised.
“The rebound was aided by a weaker dollar, though gains in Indian markets were somewhat capped by a softer USD-INR,” Modi said, adding that silver’s stronger bounce reflected its dual role as both a precious and industrial metal.
He noted that spot gold briefly jumped as much as 6% to near $5,000 an ounce, while silver surged over 12% an ounce internationally. Whether this recovery sustains, he said, will depend on whether leveraged speculative positions have been fully unwound and whether demand from Asian buyers remains steady.
Physical demand and China angle
Physical gold buying has reportedly been strong in Shenzhen, as investors stock up ahead of the Lunar New Year holidays when Chinese markets will remain closed for over a week starting February 16.
At the same time, Chinese state-owned banks have tightened controls on certain gold investment products to limit excessive price swings, a move analysts say could reduce speculative trading but not necessarily curb long-term demand.
Trade sentiment offers support
Reports of progress on an India–EU trade deal and comments from US President Donald Trump about a potential sharp tariff cut for India have added a layer of optimism to global markets. However, traders remain cautious as official confirmation from India is still awaited.
Market participants are also waiting for preliminary global PMI data and US private payroll numbers later in the day for clearer direction on growth and monetary policy.
Technical levels to watch
Rahul Kalantri, VP Commodities at Mehta Equities, said bullion has stabilised after two days of sharp selling and is holding above key psychological levels.
For gold, he sees international support at $4,855–$4,775 an ounce and resistance at $5,060–$5,150 an ounce. For silver, support lies at $79.80–$74.75 an ounce, with resistance at $89.15–$94.80 an ounce.
In rupee terms, Kalantri flagged ₹1.47 lakh–₹1.45 lakh per 10 grams as support for gold, with resistance at ₹1.52 lakh–₹1.55 lakh per 10 grams. For silver, he placed support at ₹2.59 lakh–₹2.52 lakh per kg and resistance at ₹2.74 lakh–₹2.80 lakh per kg.
MCX gold April contracts climbed nearly ₹7,000, or about 4.5%, to ₹1.60 lakh per 10 grams, while MCX silver March contracts jumped more than ₹16,000, or around 6%, to ₹2.84 lakh per kg. Traders said the rally reflected a mix of value buying, short covering and improved sentiment in international markets.
Globally, spot gold rose over 2% on Wednesday (February 2) as the dollar retreated against major currencies, making bullion more attractive to overseas buyers. Silver also outperformed, tracking both precious-metal strength and broader risk-on sentiment.
Why prices rebounded sharply
According to Manav Modi, Commodities Analyst at Motilal Oswal Financial Services, gold and silver had fallen sharply in the previous three sessions — with gold correcting nearly 15% — which triggered bargain hunting once prices stabilised.
“The rebound was aided by a weaker dollar, though gains in Indian markets were somewhat capped by a softer USD-INR,” Modi said, adding that silver’s stronger bounce reflected its dual role as both a precious and industrial metal.
He noted that spot gold briefly jumped as much as 6% to near $5,000 an ounce, while silver surged over 12% an ounce internationally. Whether this recovery sustains, he said, will depend on whether leveraged speculative positions have been fully unwound and whether demand from Asian buyers remains steady.
Physical demand and China angle
Physical gold buying has reportedly been strong in Shenzhen, as investors stock up ahead of the Lunar New Year holidays when Chinese markets will remain closed for over a week starting February 16.
At the same time, Chinese state-owned banks have tightened controls on certain gold investment products to limit excessive price swings, a move analysts say could reduce speculative trading but not necessarily curb long-term demand.
Trade sentiment offers support
Reports of progress on an India–EU trade deal and comments from US President Donald Trump about a potential sharp tariff cut for India have added a layer of optimism to global markets. However, traders remain cautious as official confirmation from India is still awaited.
Market participants are also waiting for preliminary global PMI data and US private payroll numbers later in the day for clearer direction on growth and monetary policy.
Technical levels to watch
Rahul Kalantri, VP Commodities at Mehta Equities, said bullion has stabilised after two days of sharp selling and is holding above key psychological levels.
For gold, he sees international support at $4,855–$4,775 an ounce and resistance at $5,060–$5,150 an ounce. For silver, support lies at $79.80–$74.75 an ounce, with resistance at $89.15–$94.80 an ounce.
In rupee terms, Kalantri flagged ₹1.47 lakh–₹1.45 lakh per 10 grams as support for gold, with resistance at ₹1.52 lakh–₹1.55 lakh per 10 grams. For silver, he placed support at ₹2.59 lakh–₹2.52 lakh per kg and resistance at ₹2.74 lakh–₹2.80 lakh per kg.
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