The Indian bullion market witnessed a historic Gold and Silver price crash as prices on the Multi Commodity Exchange (MCX) plummeted by 9% on Sunday. This massive sell-off, occurring just hours before the Union Budget 2026, has sent shockwaves through the jewellery trade and left investors questioning if this is a buying opportunity or a systemic decline.
The ongoing turmoil in the precious metals segment has intensified following a brutal two-day global sell-off. While gold fell by ₹13,711 to settle at ₹1,38,634 per ten grams, silver saw an even more aggressive decline, dropping ₹26,273 to reach ₹2,65,652 per kilogram. This downward spiral follows a volatile Friday where global spot markets saw gold’s biggest single-session drop since the early 1980s.
The Budget 2026 Connection and Duty Speculation
A significant factor behind the domestic Gold and Silver price crash is the mounting speculation regarding the Union Budget. Market participants are betting on a potential cut in bullion import duty by Finance Minister Nirmala Sitharaman. Currently, the total tax load stands at approximately 9%, comprising 6% basic customs duty and 3% GST.
There is widespread chatter that the government might slash the basic customs duty from 6% to 4%. If such a move is announced, domestic prices could see a further correction of ₹2,000 to ₹3,000 per ten grams for gold, provided global rates remain stable. This anticipation has led many buyers to stay on the sidelines, further exacerbating the price drop.
Global Triggers: The ‘Trump Factor’ and the Fed
The roots of this crash extend far beyond Indian borders. Analysts point toward the political landscape in the United States as a primary catalyst. Reports suggesting that President-elect Donald Trump might pick a hawkish Federal Reserve Chair have strengthened the US Dollar. Since precious metals are priced in dollars, a stronger greenback invariably makes gold and silver more expensive for holders of other currencies, leading to a massive liquidation.
Furthermore, the collapse in Gold and Silver ETFs (Exchange Traded Funds) suggests significant profit-taking. After hitting record highs recently, institutional investors are rebalancing their portfolios amid fears of sustained higher interest rates in the US, which diminishes the appeal of non-yielding assets like bullion.
Silver: The Center of the Volatility Storm
While gold’s fall was historic, silver remains the more volatile of the two. On Friday, silver prices crashed as much as 37% intraday. Beyond its status as a safe-haven asset, silver’s value is heavily tied to its industrial applications in solar energy, electronics, and manufacturing.
Experts from PL Wealth suggest that while the current correction is violent, it is consistent with silver’s historical volatility of 25-35%. The firm noted that the year-long rally in silver had left the metal overbought, making a sharp correction inevitable once the global sentiment shifted.
Impact on Jewellers and Investors
The timing of this Gold and Silver price crash has put Indian jewellers in a difficult position. While a price correction usually boosts retail demand, the extreme volatility has created a sense of fear among consumers. Jewellers are hopeful that a duty cut in the Budget will provide the necessary clarity to revive festive and wedding season buying.
For investors, the advice remains cautious. Financial consultancies like Choice Wealth have urged individuals to avoid emotional selling. They recommend a “staggered entry” approach—buying in small increments—rather than making lump-sum investments during such high-velocity price movements.
The Policy Tug-of-War
The government faces a delicate balancing act in the upcoming Budget. A duty cut would satisfy the jewellery lobby and potentially reduce smuggling, but it also risks a surge in imports, which could widen the current account deficit and put pressure on the Indian Rupee. This policy uncertainty is contributing to the “violent gap down” seen on the MCX.
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