We’re seeing a rebound in the precious metals, as the gold price is once again back over the $5,000 per ounce mark, while the silver futures are up $2.21 to $77.89.
Of course, it’s always good to see a rebound like that after another sharp sell-off, and maybe the positive out of all of this is that at least we’re getting used to it.
I want to be careful to not say that the price doesn’t matter, although given the $60 range that we’ve seen over the past month, it’s definitely one of those times where having your underlying fundamental opinion about what’s happening, and then being able to take a step back from the daily volatility, can go a long way in making good decisions.
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Yesterday, we talked aboutthe conditions in the Chinese silver market, and we will dig into India. Fortunately, Metals Focus has put out some reports highlighting what’s going on there, andlet’s take a look at them here.
Investor appetite was strong for much of the rally in 2025, during which domestic silver prices surged by 170%. However, as the rally extended into January 2026, signs of fatigue began to emerge. The rapid rise in prices made investors increasingly cautious. Once prices breached the psychologically important Rs.300,000 level on 19th January and subsequently crossed Rs.400,000 by 29th January, profit-taking emerged.
Market conditions deteriorated sharply in the last few days when silver prices witnessed a pronounced fall. On the Multi Commodity Exchange (MCX), silver hit the lower price limit of 27%, triggering panic among investors and consumers. This was followed by heavy selling in the physical market.
It’s interesting to see what’s happening in India right now, as they have traditionally been known as a price-sensitive buyer, yet what Metals Focus is describing about their order flow over January, and then into February on the price decline, is the opposite of their normal pattern.
Over the past few weeks, market sentiment has also been influenced by speculation around a possible import duty hike in the country’s 1st February budget. Anticipation of higher duties pushed up premiums across physical and futures markets, with futures on the MCX at one point trading nearly 10% above the landed cost of silver. With no change announced for import duties, some of these premiums began to unwind, narrowing the spot-futures spread.
Government policy in India is often a big variable, and you might remember how, back in July of 2024,the import levels surged when the tax treatment was reduced.
Source: SGT Report
