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Informist, Tuesday, Feb. 3, 2026

 

By Ashutosh Pati

 

MUMBAI – Gold futures are expected to be extremely volatile in February, with some analysts seeing prices stabilising in 2-3 weeks before moving up again while others say it may take 2-3 months for prices to stabilise and every rally in the month will be sold off.

 

Gold was among the best performing assets in 2025 and started 2026 on a strong footing with prices rising around 30% in January. The surge was driven by, among other factors, heightened geopolitical tensions, concern about the independence of the US Federal Reserve, and speculative buying by Chinese investors. On the last trading day of the month, however, prices of the precious metal "literally collapsed". The collapse flowed into the first trading day of February.

 

As per the median of estimates from eight broking firms polled by Informist, the April gold futures on the Multi Commodity Exchange of India are expected to be in a range of INR 130,500-INR 164,100 per 10 grams in February. On COMEX, gold prices are seen in a range of $4,400 per ounce to $5,140 per ounce during the month.

 

Prices of the precious metal plunged around 15% Friday from an all-time high of $5,626.8 per ounce. The immediate trigger for the sell-off was US President Donald Trump's decision to nominate Kevin Warsh, a former Fed governor, as the next chair of the board of governors of the US central bank.

 

"Warsh is viewed as the most hawkish candidate, which has sent the US dollar sharply higher and prompted widespread profittaking among investors who had been positioned for a weaker dollar," analysts at ING said in a report.

 

However, Warsh's nomination was not all that surprising as he had been one of the top contenders, an analyst at a global investment bank said. Other markets showed nowhere near as strong a reaction as the precious metals market did to the decision, showing that participants were only waiting for an opportunity to book profits, the analyst said.

 

Another factor that led to the prices plunging was the Chicago Mercantile Exchange raising margins on gold futures. Gold prices had risen to over $5,500 per ounce from $4,000 per ounce in just three months. "Gold was technically overextended, trading far above trend averages, making it vulnerable to profit-booking," Jigar Trivedi, senior research analyst at Reliance Securities, said. "CME margin hikes triggered forced liquidation among leveraged participants, accelerating downside momentum."

 

Kunal Shah, vice-president and head of commodities research at Nirmal Bang Securities Pvt. Ltd., said "this was a long-due profit-taking". Shah said gold prices will remain under pressure throughout the month and "every rally will be sold off". Shah sees the maximum upside for gold prices in February at $4,900-$5,000 per ounce while the bottom should be at $4,000-$4,200 per ounce.

 

On the domestic bourse, Reliance's Trivedi sees the downside between INR 137,000 and INR 133,000 per 10 grams. "This area should attract institutional dip buying if selling pressure moderates," he said. "In a deeper liquidation scenario, (INR) 1,32,000–1,30,000 (per 10 grams) becomes the critical floor; a sustained break below this would imply a broader (macroeconomic) shift."

 

However, once the volatility subsides, which might take a few weeks or a few months, prices will resume the uptrend as the structural drivers such as central bank buying, demand for ETFs, and elevated geopolitical risks remain firmly in place, analysts said.

 

Gold's fundamentals are still strong. Once the panic selling and profit taking cool, prices could start inching up after the first week of February, Manav Modi, assistant vice-president at Motilal Oswal Financial Services Ltd., said. Demand from global central banks and ETFs remains strong, Modi said.

 

Gold's long-term trajectory remains the same due to the continuing trend of de-dollarisation and de-globalisation, Anindya Banerjee, head of currency and commodity research at Kotak Securities, said. We will continue to see institutional allocation to gold, mostly from the West, and remain very bullish, Banerjee added.

 

While Motilal Oswal's Modi said the volatility would settle down in a week, Banerjee said it would take at least 2-3 months, maybe even longer. There are extreme views in the market right now and it will take some time for these to subside, Banerjee said.

 

"...the broader structure stays constructive, supported by central-bank accumulation, geopolitical risk premium, and long-term inflation hedging," Reliance's Trivedi said. "Once speculative excess is cleared, gold is likely to transition into a base-building phase before resuming its uptrend in H2 (Jul-Dec) 2026."

 

While volatility is expected to persist in the market in the short term, the current pullback looks more like a much-needed correction than the start of a new trend. At 1558 IST, the most-active April gold contract on COMEX was 6.1% higher at $4,938.8 per ounce. The same month contract on the MCX was 5.4% higher at INR 151,800 per 10 grams.

 

The following are the details of estimates from eight brokerages for gold prices in February, in alphabetical order:

 

Brokerage	MCX support (INR/10 gm)	MCX resistance (INR/10 gm)	COMEX support ($/oz)	COMEX resistance ($/oz)
Kedia Advisory	125,000	164,200	4,240	5,080
Kotak Securities	140,000	164,000	4,500	5,200
Motilal Oswal Financial Services	125,000	170,000	4,700	5,200
Nirmal Bang Securities	105,000	167,000	4,300	5,000
Prithvi Finmart	128,000	155,000	3,980	5,050
Reliance Securities	133,000	154,000	4,620	4,910
SMC Global Securities	141,000	166,300	4,450	5,380
Ventura Securities	135,000	155,000	4,350	5,500
Median	130,500	164,100	4,400	5,140

 

End

 

US$1 = INR 90.26

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

 

Edited by Rajeev Pai

 

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