Gold Stages Dramatic Recovery After Budget Day Selloff

Gold prices in India experienced a day of extreme volatility on the day of the Union Budget 2026 presentation. The precious metal managed a remarkable recovery, ending the session in positive territory after a steep intraday plunge. This dramatic swing highlights the nervous sentiment in the bullion market surrounding major fiscal events.

A Day of Wild Swings for Bullion Investors

The trading session began with a sharp and brutal selloff in gold futures on the Multi Commodity Exchange (MCX). Prices plummeted, at one point showing a loss of approximately Rs 9,500 per 10 grams. This pre-Budget drop was driven by several factors. Traders engaged in heavy profit booking, locking in gains after a recent price rally. Simultaneously, investors faced margin pressures, forcing some to sell holdings to meet requirements. The lack of anticipated relief measures for the jewellery sector in the Budget speech further dampened sentiment, contributing to the early decline.

Prices Rebound on Bargain Hunting

However, the steep fall proved to be short-lived. As the session progressed, buyers stepped back into the market, seeing value at the lower price levels. This wave of bargain hunting fueled a powerful rebound. Gold prices surged nearly 7% from their intraday low, completely erasing the massive loss and closing the day with gains. This recovery underscores gold’s traditional role as a safe-haven asset, with investors often using significant dips as buying opportunities for long-term portfolio protection.

Silver Remains Subdued After Recent Turmoil

While gold stole the show with its recovery, silver presented a different picture. The white metal ended the volatile Budget session largely flat. This muted performance follows a period of historic volatility for silver, which recently experienced record crashes alongside gold. Silver often exhibits higher price swings than gold due to its dual role as both a precious metal and an industrial commodity. Its flat close suggests the market is still digesting recent shocks and awaiting clearer direction, possibly from global industrial demand trends.

Context for Long-Term Investors

For general investors, this event is a potent reminder of the inherent volatility in commodity markets, especially around major policy announcements. Budgets can introduce changes to import duties, taxes, or sector policies that directly impact local gold and silver prices. While the day ended positively for gold, the intraday chaos demonstrates how quickly prices can move based on trader sentiment and speculative flows. Experts advise that investors with exposure to bullion should maintain a long-term perspective, using physical gold or sovereign bonds for stability rather than reacting to daily futures market swings. The resilience shown in the rebound also reinforces gold’s enduring appeal in diversified investment portfolios during uncertain times.