Gold prices showed signs of recovery as international rates increased by 1% to $4,373.59 per ounce, bouncing back from the previous session's sharp decline. The precious metal demonstrated resilience after witnessing significant correction from recent record-breaking levels, with renewed buying interest emerging at lower price points.

Current Market Performance

The international gold market displayed recovery momentum with prices climbing back above the $4,370 per ounce level. This upward movement represents a notable bounce from recent lows, indicating renewed investor interest in the precious metal following the earlier correction.

Technical Analysis and Market Outlook

Jateen Trivedi, Vice President - Research Analyst at LKP Securities, emphasized that gold continues to trade in a structurally bullish zone. While momentum indicators suggest short-term consolidation is possible, the broader trend favors buying on declines rather than selling into strength.

The relative strength in the Indian rupee is keeping MCX gold slightly weaker compared to COMEX prices, though this impact remains marginal as global gold sentiment stays strong. Any renewed rupee weakness could quickly translate into sharper upside in MCX gold.

Key Technical Indicators

Gold remains in a strong uptrend, trading near the upper end of its recent range after the sharp rally. The price has comfortably held above the breakout zone of ₹131,500.00–₹132,000.00 and continues to form higher highs and higher lows on the daily chart.

Momentum Indicators:

• RSI (14): Hovering near 73, reflecting strong bullish momentum despite being in overbought territory
• Bollinger Bands: Gold trading close to upper band with expanding bands, indicating trend continuation
• Moving Averages: EMA 8 near ₹134,800.00 and EMA 21 near ₹133,400.00, both sloping upward as dynamic support
• MACD: Remains in positive territory with signal line above zero, supporting the prevailing uptrend

Trading Strategy

Analysts recommend a buy-on-dips approach despite the recent volatility in international markets:

The consolidation near recent highs indicates strength rather than distribution, suggesting the underlying trend remains intact. As long as prices sustain above ₹132,500.00 on a closing basis, the broader bullish structure remains undisturbed, making current levels attractive for accumulation on any further weakness.

The current recovery to $4,373.59 per ounce reinforces the view that gold maintains strong underlying support. Despite recent volatility, the overall sentiment remains bullish, with the 1% increase demonstrating the precious metal's ability to attract buying interest at lower levels.

MCX silver March futures witnessed unprecedented volatility, crashing over 10% or ₹21,000 per kg from an all-time high of ₹2,54,174 to ₹2,33,120 within a single trading session. The dramatic reversal caught bullish traders off guard after silver's historic breach above the ₹2.5 lakh mark, exposing the fragility of a rally that has delivered over 170% gains in 2025.

Zerodha CEO's Warning on Position Sizing

Nithin Kamath, co-founder and CEO of Zerodha, used the dramatic silver volatility as a teachable moment for traders. Sharing a chart of MCX silver futures on X, he warned: "This type of move is what every trader dreams of capturing, but it can also be a nightmare to manage without a good understanding of how to size your positions. Especially when something moves ~10% intraday." Kamath noted that commodity trading volumes appear to be rising sharply, amplifying both opportunities and risks.

Kamath's warning about position sizing reflects his consistent emphasis on risk discipline. He has previously cautioned that poor position sizing is among the most overlooked causes of heavy trading losses, arguing that traders can be right on direction majority of the time and still lose everything if positions are sized poorly. The Zerodha CEO has referenced lessons from veteran traders, underscoring that risk management is not a secondary concern but a core pillar of trading success.

Global Silver Market Retreat

Silver retreated in international markets after reaching a record high of $80.00 per ounce, with spot silver shedding 4.80% to $75.32 per ounce from its all-time high of $83.62. The selloff was accompanied by similar weakness in gold, which also fell from levels near historic highs during the session. Investors engaged in mass profit-booking as market outlook regarding geopolitical risks shifted, reducing safe-haven buying appetite.

Key Factors Behind the Crash

Peace Talk Progress Reduces Safe-Haven Demand

The immediate trigger came from US President Donald Trump's announcement regarding peace talks on Sunday. Trump's statements about potential progress in resolving geopolitical tensions led to a significant reduction in safe-haven buying, prompting investors to book profits across the precious metals complex.

CME Margin Hike Adds Selling Pressure

The Chicago Mercantile Exchange raised the margin requirement for March 2026 silver futures contracts by $5,000, forcing traders to post additional collateral. The move triggered liquidation pressure as traders were compelled to reduce exposure quickly, amplifying intraday volatility across major derivatives platforms.

Technical and Fundamental Pressures

Other contributing factors included rally fatigue after silver's extraordinary run, strengthening US dollar and yields reducing appeal of non-yielding commodities, and supply-demand imbalances that have characterized the silver market throughout the rally.

Market Implications and Rising Commodity Participation

The episode underscores a broader shift in Indian commodity markets, where rising participation and leverage are pushing volumes higher while making price action more unforgiving. Silver's designation as a critical mineral in the US has added to speculative interest, contributing to the metal's outperformance relative to gold.

As Kamath emphasized, sharp commodity moves like silver's latest volatility are precisely the environments where position sizing mistakes become fatal. The extraordinary rally has hit a pause, serving as a stark reminder that volatility creates opportunity only for those who manage risk appropriately and survive the market's unpredictable swings.