Why Gold And Silver Prices In India Rose Sharply After Recent Crash Despite Trade Stability

Gold and silver prices in India surged after a sharp correction, defying improved global trade sentiment. Here’s an explainer on the technical factors, volatility, and futures positioning driving the unusual rise in precious metals.

Gold and silver prices in India moved higher this week, surprising markets that expected safe‑haven demand to ease after India signed major trade deals with the United States and the European Union. Normally, such developments reduce appetite for precious metals, but prices rose sharply due to technical factors, volatility in global commodities, and futures market positioning.

On the Multi Commodity Exchange, silver surged to Rs 2,53,792 per kg, up Rs 17,531 or 7.42% in early trade. Gold also posted strong gains, quoted near Rs 1,49,101 per 10 grams, higher by Rs 5,110 or 3.55%. In the physical market, gold hovered around Rs 1,49,250 per 10 grams, while silver was priced near Rs 2,54,830 per kg. Prices remained largely uniform across major cities, with only minor variations due to local taxes and jeweller margins.

The rise comes after a dramatic correction last week, when both metals erased a portion of their record‑breaking January gains. That sell‑off was triggered by changes in trading conditions, margin hikes in global exchanges, and expectations of tighter US monetary policy. The correction was amplified by extreme overbought levels, with silver having surged more than 60% in a month and gold over 20%. Profit‑taking quickly turned into panic selling as liquidity thinned and volatility spiked.

This week’s rebound reflects renewed interest from traders who view the earlier plunge as a technical adjustment rather than a fundamental shift. Gold and silver remain supported by long‑term drivers such as geopolitical tensions, central bank buying, and macroeconomic uncertainty. The violent drop was more of a reset, clearing speculative froth and allowing prices to stabilize at structural levels.

Gold futures are now trading within Rs 1,38,000 to Rs 1,48,000 after posting record highs near Rs 1,80,779. Despite volatility, prices continue to hold above key support zones, with pullbacks absorbed by buyers. A sustained move above Rs 1,50,000 could revive upside momentum toward Rs 1,65,000 to Rs 1,70,000, keeping the medium‑term outlook positive.

Silver has seen sharper swings but remains in a strong long‑term trend. Futures are currently trading between Rs 2,20,000 and Rs 2,60,000 after surging above Rs 4,00,000 last month. The Rs 2,20,000 to Rs 2,35,000 band is acting as a crucial base, while Rs 2,60,000 to Rs 2,70,000 serves as immediate resistance. Sustained momentum could extend the move toward Rs 3,25,000, with dips continuing to attract accumulation from positional traders.

In essence, the unusual rise in gold and silver prices despite improved trade stability highlights the dominance of technical factors and speculative positioning in short‑term price action. While long‑term safe‑haven demand may ease, volatility, liquidity shifts, and futures market dynamics are keeping precious metals elevated. Investors will need to closely track currency movements, US policy signals, and global risk trends in the days ahead