Gold investors faced a reality check on Friday, February 6, 2026, as the yellow metal’s historic rally hit a wall of volatility. In India, MCX Gold futures opened at ₹1,50,269 per 10 grams, marking a 0.73% decline. This downward pressure mirrors a sharp 2.38% correction in international spot prices, which crashed to 4,773 per ounce during Asian trading hours. The sudden pivot comes as “forced unwinds” across crypto and precious metals collide with a hawkish shift from US Federal Reserve officials.
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Market Pullback: Gold Dips Amid Resurfacing Volatility
The current dip is less about a change in gold’s long-term value and more about a liquidity squeeze. After reaching record highs in late January, the market is seeing a “textbook” correction.
MCX Support: Analysts identify the immediate floor at ₹1,48,000.
Comex Resistance: Prices are struggling to break back above the 5,000 psychological barrier.
The China Factor: $1 Billion Outflow Shakes Investor Confidence
A major catalyst for the Friday slump was the news of record outflows from Chinese Gold ETFs. On Tuesday and Wednesday, major bullion-backed funds in mainland China reportedly saw nearly 1 billion (₹8,300 crore) withdrawn.
This “distribution mode” by Chinese retail investors—previously the strongest buyers in the market—suggests that the parabolic run of January may have reached a point of exhaustion. Furthermore, the Shanghai Gold Exchange (SGE) has recently increased margin requirements, forcing some speculative traders to liquidate their positions to cover costs.
US Macro Pressure: Why ADP Data is Spooking the Bulls
While many were waiting for the Nonfarm Payrolls (now rescheduled to February 11 due to the brief government shutdown), the ADP Private Employment report provided a bearish surprise.
Actual Private Jobs: 22,000 (January)
Expected: 48,000
Usually, weak jobs data helps gold by pressuring the Fed to cut rates. However, Fed Governor Lisa Cook recently signaled resistance to further cuts, citing “persistent upside inflation risks.” This hawkish stance, combined with the US Dollar Index (DXY) grinding toward 97.50, has stripped gold of its non-yielding appeal in the short term.
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Trump’s Tariff Policy: A Hidden Support for the Rupee?
In a significant geopolitical development, President Trump’s decision to lower tariffs on Indian goods from 50% to 18% has bolstered the Indian Rupee.
“The USD-INR rate standing at 90.28 helps buffer some of the international price volatility for Indian buyers,” notes Jateen Trivedi, VP Research Analyst at LKP Securities.
A stronger Rupee makes imported gold cheaper in domestic terms. Consequently, Indian gold prices might see a steeper decline than international prices if the currency continues to appreciate toward the 89.50 mark.
Expert Forecast: Consolidation or Deeper Correction?
Technical analysts are now divided on the next directional move:
The Bull Case: A “buy-on-dips” approach remains valid as long as gold holds above 4,360. Structural drivers like de-dollarization and central bank buying remain intact for 2026.
The Bear Case: A decisive break below the 4,550 (₹1,40,000) consolidation range could trigger a deeper slide toward 4,200.
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What This Means for You
If you are a retail buyer or planning for the upcoming wedding season, this correction offers a strategic entry point. However, given the high volatility, it is advisable to avoid “lump-sum” purchases. Instead, consider staggering your buys over the next two weeks. For Sovereign Gold Bond (SGB) holders, the current price action is a reminder of the volatility inherent in 2026’s “high-interest, high-inflation” regime.
Next Steps
Watch for the US Nonfarm Payrolls and CPI data on February 11 and 13, respectively. These reports will be the final word on whether the Fed pauses its rate-cut cycle. You should also monitor SGE Premiums; if the premium over London prices drops into negative territory, it signals that the Chinese sell-off is accelerating. Finally, check the ₹1,48,000 level on MCX today—a close below this could signal further pain on Monday.
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