Gold and Silver began 2026 on a cautious note in the domestic market, extending the corrective trend observed toward the end of 2025. This subdued start follows an exceptional year that delivered historic returns for precious metals investors, with current weakness attributed to profit-taking activities, weak global market cues, and thin liquidity as global exchanges observe the New Year holiday.

Current City-Wise Gold Rates

As markets opened on New Year's Day, gold prices across major Indian cities reflected the ongoing consolidation phase:

Chennai recorded the highest gold rates among metro cities at ₹1,35,930 per 10 grams for 24-karat gold, while Kolkata showed the most competitive pricing at ₹1,34,350 per 10 grams.

Silver Pricing Across Markets

Silver maintained relatively strong positioning despite the overall precious metals correction, with prices varying across cities due to local demand and tax variations:

Southern markets including Chennai and Hyderabad commanded premium pricing for silver, reflecting stronger regional demand patterns.

Exceptional 2025 Performance Review

The cautious New Year start contrasts sharply with the landmark performance delivered throughout 2025. Both precious metals achieved remarkable gains that significantly outpaced traditional asset classes:

Expert Market Analysis

Inderbir Singh Jolly, CEO of PL Wealth, highlighted that gold's strong 2025 performance reflected a structural shift in portfolio positioning by both investors and central banks. The rally received support from sustained inflows into exchange-traded funds, continued central bank buying for reserve diversification, and heightened geopolitical and macroeconomic risks.

Harshal Dasani, Business Head at INVasset PMS, emphasized that the recent correction should be viewed as a positioning reset rather than a breakdown of the long-term investment thesis. He observed that silver had particularly turned into a momentum-driven trade during 2025, making it vulnerable to profit-booking and leveraged unwinds once market sentiment softened.

Market Outlook

Rahul Kalantri, Vice-President (Commodities) at Mehta Equities, suggested that gold is more likely to enter a consolidation or sideways phase in 2026 following its strong rally. He noted that silver could continue finding support from strong industrial demand and energy-transition themes, though volatility is expected to remain elevated.

Jigar Trivedi, Senior Research Analyst at Reliance Securities, pointed to lingering geopolitical uncertainties and monetary policy expectations as factors that continue to underpin safe-haven demand for bullion, even as near-term price corrections play out.

A severe financial crisis has engulfed Rajkot's silver trading community, with 44 traders declaring insolvency amid a dramatic surge in global silver prices. According to a report by local newspaper Gujarat Mirror, these traders face combined liabilities totaling ₹3,500 crore after being caught in an unprecedented market squeeze.

Crisis Unfolds as Silver Crosses Critical Threshold

The financial turmoil erupted when silver prices skyrocketed beyond ₹1.25 lakh per kilogram, trapping numerous Rajkot-based traders who had positioned themselves for stable or declining prices. These traders, confident that silver would not breach the ₹1.25 lakh threshold, continued selling short positions throughout the rally.

The gap between the traders' selling prices and current market rates, known locally as valan, expanded to unmanageable proportions as silver prices continued their relentless climb. This price differential created insurmountable financial burdens for the short-positioned traders.

Emergency Meeting Reveals Scale of Losses

Facing mounting pressure, the affected traders convened an emergency meeting on Saturday night where 44 participants admitted their inability to settle outstanding debts. The meeting marked a collective surrender to the market forces that had overwhelmed their positions.

"The dealers were confident the price would not cross the ₹1.25 lakh threshold and continued to sell," the Gujarat Mirror report stated. "When the prices crossed that mark, the financial burden of the price difference became impossible to bear."

The crisis has prompted some traders to take drastic measures, with reports indicating that several have shuttered their operations and fled the market entirely.

Ripple Effects Spread Across Trading Networks

The Rajkot crisis has generated shockwaves throughout interconnected trading networks, extending far beyond the city's boundaries. The impact has reached major commercial centers including:

• Ahmedabad: Connected trading operations assessing liability exposure
• Indore: Regional trading networks evaluating risks
• Dubai: International connections tallying related obligations

Trading partners and counterparties across these locations are now working to calculate their exposure to the Rajkot traders' defaults, potentially amplifying the crisis's reach.

Market Context and Trader Positioning

The current crisis stems from traders' miscalculation of silver's price trajectory following the precious metal's stellar performance. Silver had delivered outstanding returns, leading many traders to expect a price correction or stabilization. However, the continued rally caught short-sellers in a squeeze, forcing them to cover positions at significantly higher prices than anticipated.

The situation highlights the risks associated with short-selling strategies in volatile commodity markets, particularly when traders maintain concentrated positions beyond prudent risk management thresholds.