- Gold futures fell 13% in one session – the sharpest single‑day drop since 2013.
- Silver slid 21%, dragging ETFs down 24% and slashing financing stocks.
- Hindustan Zinc’s shares tumbled 12.5% – a bellwether for commodity‑linked equities.
- Fed chair speculation and the upcoming Union Budget could swing metal prices for months.
- Analysts view the plunge as profit‑booking, not a fundamental break, opening a buying window.
You just missed the biggest gold‑silver swing of the year—now's the time to act.
Why the Gold Crash Aligns with Global Rate‑Hawk Signals
On Friday, April‑expiry gold futures on the MCX slumped from a record Rs 1,93,096 per 10 grams to Rs 1,67,406 – a 13% plunge in 24 hours. The catalyst was not a sudden demand shock but market chatter that former Fed governor Kevin Warsh, a known hawk, might replace the current chair. A more aggressive Fed stance usually strengthens the dollar, inflates bond yields, and makes non‑yielding assets like gold less attractive.
From a technical standpoint, gold breached its 50‑day moving average and entered a classic “profit‑booking” zone. Volume spikes confirm that short‑term traders were exiting positions, while long‑term holders remain intact, as evidenced by central‑bank buying reported in the last quarter.
How Hindustan Zinc’s Share Plunge Mirrors Precious‑Metal Volatility
Hindustan Zinc, India's largest silver producer, saw its stock drop to Rs 626, a 12.5% loss, mirroring the metal’s price decay. The company’s exposure is two‑fold: a direct link to spot silver prices and indirect sensitivity to gold, given the shared mining infrastructure and financing costs.
Competitors such as Vedanta and the broader MCX index also fell sharply, but Hindustan Zinc’s decline was steeper because its earnings are tightly coupled to silver purity premiums (99.9% purity). When silver futures fell 21%, the profit margin on refined silver narrowed, prompting investors to reassess valuation multiples.
Union Budget 2026: Policy Levers That Could Revive Metal Prices
The upcoming budget, slated for Sunday, is a critical inflection point. Two policy levers deserve attention:
- Import Duty Adjustments: Any reduction in duties on gold and silver imports could lower domestic price pressure, supporting higher spot prices.
- Infrastructure Funding: Increased allocation to mining‑related infrastructure (roads, power) would cut operating costs for firms like Hindustan Zinc, improving margins.
Historically, budget announcements that favor mining have buoyed commodity stocks for up to six months post‑release. The 2022 budget, for example, introduced a 5% duty cut on gold, which helped the NIFTY‑Metal index recover 8% within the quarter.
Technical Snapshot: What Charts Reveal About Gold and Silver Futures
Both gold and silver futures broke below their 200‑day moving averages – a bearish technical signal. However, the Relative Strength Index (RSI) for gold sits at 32, edging toward oversold territory. Silver’s RSI is even lower at 28, suggesting a potential rebound if buying pressure resurfaces.
Key support levels to watch:
- Gold: Rs 1,55,000 per 10 grams (previous swing low).
- Silver: Rs 3,00,000 per kilogram (mid‑year trough).
Breaks below these zones could trigger a longer‑term correction, while holds above may signal a short‑term bounce.
Historical Parallel: The 2013 Gold Rally and Its Aftermath
In mid‑2013, gold surged to an all‑time high of $1,688 per ounce before crashing 15% over two weeks. The trigger was a combination of profit‑taking and the Fed’s “taper‑talk.” Yet, the metal quickly found a new floor around $1,200, driven by lingering geopolitical risks.
Lesson for today: sharp declines often reset price baselines, and savvy investors who entered at the trough captured 30‑40% upside within a year. The same dynamics are at play with silver, whose 2013 correction was even steeper (‑23%) before rebounding.
Investor Playbook: Bull vs. Bear Cases
Bull Case
- Fed adopts a dovish stance post‑Warsh appointment, easing dollar strength.
- Union Budget introduces duty cuts and mining incentives, lifting domestic demand.
- Technical oversold signals trigger algorithmic buying, pushing futures back above key moving averages.
- Central banks resume net‑gold purchases, providing a macro floor.
Bear Case
- Warsh’s hawkish tone persists, prompting higher yields and a stronger dollar.
- Budget maintains or raises import duties, squeezing domestic price dynamics.
- Continued profit‑taking drags volume, keeping RSI in oversold range without reversal.
- Geopolitical calm reduces safe‑haven demand, leaving metals vulnerable to equity‑risk‑on flows.
Bottom line: The current volatility creates a high‑conviction entry point for long‑term investors, but position sizing and stop‑loss discipline remain essential given the macro‑policy uncertainty.