On February 1, 2026, the day the Union Budget 2026-27 was announced, the prices of gold and silver on the MCX dropped sharply. Gold April futures fell by more than 6%, losing around ₹9,140 per 10 grams and trading near ₹1,43,205. Silver March futures also fell about 6%, down almost ₹17,500 per kilogram. The fall came after strong price gains in the last few weeks, especially for silver, which had reached record highs in late January. The sharp drop also affected MCX’s own stock, which fell up to 15% and hit lower circuit limits because trading activity and confidence decreased.
Later in the session, gold recovered a little, rising nearly 7% from the lowest prices, as some traders bought gold at cheaper rates. Silver did not recover as much and remained under pressure. Analysts said this is normal after big price swings because buyers step in when prices are very low.
The main reasons for the sudden fall were profit-taking and technical selling. Traders sold their holdings to book profits after recent gains. A strong U.S. dollar and global risk concerns also made bullion less attractive in Indian rupees, adding pressure. Traders were also careful because of the Budget, unsure if changes in import taxes or duties would affect gold and silver prices.
During the session, gold traded between ₹1.40 lakh and ₹1.50 lakh per 10 grams, and silver traded around ₹2.65–2.75 lakh per kilogram. The Budget 2026 did not change import duties on gold or silver. Gold imports still have about 6% duty plus 3% GST, and silver has similar taxes. Some traders were hoping for lower import duties to support domestic prices, so the unchanged duty added to cautious market sentiment.
For investors, the day showed how volatile the market can be. Short-term traders may face big swings and sudden limits on trading. Medium-term investors should watch global trends and stable import rules, because India has limited bullion supply. Long-term investors should remember that gold and silver prices often follow global factors like the U.S. dollar, Fed policies, and international tensions, more than just local budget changes.
In summary, Budget 2026 caused big price movements in gold and silver. Gold recovered partially, but silver stayed under pressure. With no change in import duties, prices will likely continue to react to global events and investor sentiment, so investors should be careful and plan wisely before trading or investing in precious metals.