Gold witnessed one of its sharpest corrections in decades on Friday, plummeting nearly 16 per cent from record highs above $5,480-$5,626 to trade around $4,745-$4,887 per ounce, as aggressive profit-booking followed the nomination of Kevin Warsh as the next US Federal Reserve Chair.
On the Multi Commodity Exchange (MCX), gold retreated from peaks near ₹1,80,000 per 10 grams to stabilize around ₹1,49,500-₹1,49,653.
The primary trigger was President Trump’s nomination of Warsh, known for his hawkish stance on inflation control and emphasis on Fed independence. The announcement prompted a rapid macro re-pricing with the US dollar strengthening and real yields rising, leading to violent liquidation of leveraged positions in precious metals.
“Gold witnessed sharp selling pressure after margin hikes triggered aggressive profit booking in CME, where prices corrected from the recent peak of $5,500 to near $5,000,” said Jateen Trivedi, VP Research Analyst at LKP Securities. He noted that MCX gold slipped from record highs above ₹1,80,000 to intraday lows near ₹1,55,000.
Kaynat Chainwala, AVP – Commodity Research at Kotak Securities, explained that bullion prices faced headwinds from a stronger US dollar and fears that Warsh, widely viewed as an inflation hawk, could tighten monetary policy. “A sharp correction in the Nasdaq and the risk of a broader yen carry-trade unwind pose the biggest downside risks to the gold rally,” she said.
Nikunj Saraf, CEO of Choice Wealth, described the 14 per cent plunge in Gold ETFs as “classic profit-taking after Thursday’s record highs on MCX.” He noted that spot gold fell 3.9-5 per cent to $5,183 per ounce.
Despite the severity of the pullback, analysts maintain that the secular bullish structure remains intact. Ponmudi R, CEO of Enrich Money, stated that core drivers persist including “relentless central bank gold accumulation, enduring geopolitical uncertainties and fiat diversification trends.” He characterized the correction as “a healthy reset purging excess leverage and speculative froth.”
Chainwala recommended a buy-on-dips strategy, with gold expected to find support in the $5,000-$5,100 zone. Trivedi expects CME gold to remain volatile in the $4,800-$5,200 range, while MCX gold is likely to oscillate between ₹1,58,000 and ₹1,70,000.
Dr. V K Vijayakumar, Chief Investment Strategist at Geojit Investments, noted that “the sharp correction in gold and silver, if it persists, can draw investors away from precious metals to equity.”
Published on February 1, 2026
