Precious Metals Slide as Strong Dollar Triggers Gold and Silver Sell-Off

Precious Metals Slide as Strong Dollar Triggers Profit Booking

Gold and Silver Face Sharp Correction

Precious metals witnessed a sharp sell-off on Friday, with gold and silver prices tumbling from their recent highs. The decline was largely driven by a strengthening US dollar and the unwinding of yen carry trades, which together dampened investor appetite for safe-haven assets. The correction came after a strong rally in January, prompting many investors to lock in profits.

In the domestic spot market, gold prices fell 5.4% to around ₹1.66 lakh per 10 grams, marking a steep decline of nearly ₹9,545 in a single session. Silver saw an even sharper fall, plunging 10.7% to about ₹3.39 lakh per kilogram. The speed and magnitude of the fall reflected heightened volatility across global commodity markets.

ETFs See Deeper Cuts Than Spot Prices

The correction in spot prices quickly spilled over into exchange-traded funds (ETFs) linked to precious metals. Notably, ETFs declined more sharply than the underlying metals, suggesting an exit of speculative and short-term positions.

• Silver ETFs dropped between 18% and 24%
• Gold ETFs corrected by 8% to 12%

This divergence highlights how leveraged and speculative investments tend to react more aggressively during periods of market stress. Silver ETFs, which had seen strong inflows over the past few months, were particularly vulnerable during the sell-off.

Global Cues Add to Market Pressure

Market participants pointed to multiple global factors behind the sharp fall. Expectations of a more aggressive interest-rate outlook in the United States weighed heavily on precious metals, which typically struggle in a rising rate environment. Additionally, the unwinding of yen carry trades removed a key source of liquidity that had previously supported commodity prices.

The policy stance of major central banks also played a role. Japan’s central bank had earlier raised interest rates to multi-decade highs and maintained a steady stance in its recent meeting, prompting investors to reassess risk positions globally. Speculation around a potentially more hawkish US monetary leadership further added to the pressure on gold and silver prices.

Selective Buying Emerges at Lower Levels

Despite the sharp correction, the dip attracted some bargain hunting. Market participants noted that long-term investors and jewellers stepped in to buy at lower price levels, viewing the decline as a temporary pause rather than the end of the bullish trend.

Jewellery manufacturers used the opportunity to replenish inventories, although retail demand from end consumers remained muted. Many investors continue to believe that the broader outlook for gold remains constructive, supported by global uncertainty and long-term inflation concerns.

Outlook: Volatility Likely to Persist

Experts caution that precious metals may remain volatile in the near term as currency movements, global interest-rate expectations, and speculative positioning continue to influence prices. While the recent fall was driven largely by profit booking rather than a shift in fundamentals, investors are advised to remain cautious and factor in short-term fluctuations.

For long-term investors, gold and silver continue to play a role as portfolio diversifiers. However, the recent episode underscores the importance of disciplined investing and awareness of global macroeconomic triggers.

Disclaimer: The views and investment tips expressed in this article are for informational purposes only and do not represent financial advice. The views expressed are those of the sources cited and not necessarily those of this website or its management. Investing in equities or other financial instruments carries the risk of financial loss. Readers must exercise due caution and conduct their own research before making any investment decisions. We are not liable for any losses incurred as a result of decisions made based on this article. Please consult a qualified financial advisor before making any investment.

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India Cuts Food Weight in CPI to 36.75% Under New Inflation Series

India to Revamp CPI Basket: Food Weight Reduced to 36.75% in New Inflation Series

India is set to introduce a revamped Consumer Price Index (CPI) series that significantly reduces the weight of food items, a move expected to make headline inflation readings more stable and reflective of current consumption trends. Under the new framework, the share of food in the CPI basket will be cut to 36.75% from the existing 45.86%.

This structural change could help smooth inflation volatility and provide clearer signals for monetary policy, as food prices are often influenced by seasonal factors such as weather conditions and supply disruptions.

Why the CPI Basket Is Being Updated

The current CPI series is based on consumer spending patterns from 2011–12, which economists believe no longer accurately represent how Indian households spend today. Over the past decade, rising incomes, urbanisation, and greater spending on services have altered consumption behaviour.

To address this gap, the government will adopt 2024 as the new base year for CPI calculations. The year 2025 will serve as an overlap period, allowing historical inflation data to be statistically converted to the new base for continuity and comparison.

More Spending Categories for Better Price Tracking

One of the key changes in the new inflation series is the expansion of major CPI groups. The number of headline categories will increase to 12 from the current six, bringing India’s inflation measurement framework closer to global best practices.

This broader classification is expected to improve price tracking across sectors and provide policymakers with deeper insights into inflation drivers.

Food’s Shrinking Share in Household Budgets

Recent household expenditure surveys indicate that food now accounts for a smaller share of total spending compared to a decade ago:

• Urban households: Food share has declined to 39.7% from about 43% in 2011–12.
• Rural households: Food spending stands at around 47%, down from nearly 53% earlier.

The revised CPI weights aim to better capture these shifts, ensuring inflation data mirrors present-day realities.

Housing and Utilities Remain Key Inflation Drivers

The combined weight of housing, water, electricity, gas, and other fuels will be fixed at 17.66%, making it the second-largest contributor to inflation after food.

Notably, rural house rent has been included in CPI for the first time, and the sample size for tracking house rents has been expanded in both rural and urban areas. This change is expected to improve the accuracy of shelter-related inflation measurements.

Transport, Health, and Services Gain Importance

Other major components in the revised CPI basket include:

• Transport: 8.8%
• Health: 6.10%
• Clothing and footwear: 6.38%

Service-oriented categories such as restaurants and accommodation, education, and information and communication will each carry weights of around 3.5%, highlighting the economy’s gradual shift toward services.

E-commerce Prices to Be Tracked for the First Time

In a significant modernization step, the CPI will now incorporate prices from e-commerce platforms. Items such as airfares, OTT subscriptions, telecom plans, and selected online services will be monitored, reflecting the growing role of digital consumption in household spending.

Recent Inflation Trends

India’s headline inflation rose in December to 1.33% year-on-year, marking its fastest pace in three months, as the decline in food prices moderated. In November, inflation had stood at 0.71%.

The updated CPI structure is expected to offer a clearer and more balanced view of inflation trends going forward, aiding both investors and policymakers.

Disclaimer: The views and investment tips expressed in this article are for informational purposes only and do not represent financial advice. The views expressed are those of the sources cited and not necessarily those of this website or its management. Investing in equities or other financial instruments carries the risk of financial loss. Readers must exercise due caution and conduct their own research before making any investment decisions. We are not liable for any losses incurred as a result of decisions made based on this article. Please consult a qualified financial advisor before making any investment.

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Rupee Hits Record Low Beyond 92 vs Dollar Amid FII Outflows and Importer Demand

Rupee Slips Past 92 per Dollar to Record Low Amid Capital Outflows and Importer Worries

The Indian rupee weakened sharply on Thursday, sliding past the critical 92-per-dollar mark for the first time and touching a fresh all-time low of 91.99. The fall reflects sustained pressure from weak foreign capital inflows, heightened corporate hedging activity, and persistent demand for dollars from importers.

This latest move underscores the growing strain on the domestic currency despite relatively strong macroeconomic fundamentals. Market participants noted that anxiety over further depreciation has intensified, prompting companies to protect themselves against currency risks.

Sharp Decline in a Short Span

The rupee’s breach of the 92 level came just days after it crossed 91 for the first time, highlighting the speed of the recent depreciation. So far in the current calendar year, the currency has weakened by around 2%. Since the imposition of higher U.S. tariffs on Indian merchandise exports, the cumulative decline has been close to 5%.

This weakness has persisted even as India continues to post strong growth numbers. Official data shows that the economy expanded by 8.2% in the quarter ended September 30, reinforcing the contrast between domestic growth momentum and external sector pressures.

Central Bank Seen Stepping In

Traders indicated that the central bank likely intervened in the currency market ahead of the local session to curb excessive volatility as the rupee neared the psychologically important 92 mark. Such moves are generally aimed at smoothing sharp fluctuations rather than defending a specific level.

Policymakers have consistently maintained that they do not target a fixed exchange rate or band. Instead, interventions are used selectively to prevent disorderly market movements and maintain overall financial stability.

External Pressures Continue to Weigh

Several external factors have combined to keep the rupee under pressure. These include:

• Steep U.S. tariffs on Indian exports, which have strained trade flows
• Large foreign portfolio outflows, reducing dollar supply in domestic markets
• Rising bullion imports, increasing demand for foreign currency
• Corporate risk aversion, with firms actively hedging against further depreciation

Since the tariff measures took effect, the rupee has also weakened by around 7.5% against both the euro and the Chinese yuan. On a trade-weighted basis, the real effective exchange rate stood at 95.3 in December, marking its lowest level in nearly a decade.

Hedging Activity Adds to Pressure

A notable shift in market behavior has further exacerbated the rupee’s decline. Importers and corporate entities have increased hedging in the forward market to guard against a weaker currency. At the same time, exporters have slowed their dollar sales, reducing supply and amplifying downward pressure on the rupee.

Analysts believe this imbalance between dollar demand and supply has played a significant role in the recent sharp moves, especially during periods of thin liquidity.

Outlook Remains Cautious

Market experts expect volatility to remain elevated in the near term. While there is optimism that current tariff-related pressures may ease over time, delays in policy relief could continue to weigh on India’s external balances.

Some forecasts suggest that the rupee could weaken further over the next year, though periodic central bank intervention and rebuilding of foreign exchange reserves on favorable moves may help limit excessive swings.

For investors and businesses, the recent currency movement highlights the importance of monitoring global trade developments, capital flows, and risk management strategies in an increasingly uncertain external environment.

Disclaimer: The views and investment tips expressed in this article are for informational purposes only and do not represent financial advice. The views expressed are those of the sources cited and not necessarily those of this website or its management. Investing in equities or other financial instruments carries the risk of financial loss. Readers must exercise due caution and conduct their own research before making any investment decisions. We are not liable for any losses incurred as a result of decisions made based on this article. Please consult a qualified financial advisor before making any investment.

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TVS Motor Q3 FY26 Results: Net Profit Rises 49%, Revenue and Sales at Record High

TVS Motor Q3 FY26 Results: Net Profit Jumps 49%, Revenue and Sales Hit Record High

TVS Motor Company delivered a robust financial performance in the third quarter of FY26, reporting its highest-ever quarterly sales, revenue, and profits. Strong demand across motorcycles, scooters, electric vehicles, and three-wheelers, along with margin expansion, supported the company’s impressive growth during the quarter ended December 31, 2025.

Strong Growth in Profit and Revenue

The company’s consolidated net profit surged 49% year-on-year (YoY) to ₹841 crore in Q3 FY26, compared with ₹566 crore in the same quarter last year. Revenue from operations rose sharply by 34% YoY to ₹14,756 crore, up from ₹11,035 crore in Q3 FY25, reflecting healthy volume growth and improved product mix.

Operating performance also remained strong. EBITDA climbed 37.2% to ₹2,271 crore from ₹1,654 crore a year ago. The EBITDA margin improved to 15.3% in the reporting quarter, compared with 14.9% in Q3 FY25, indicating better cost efficiencies and operating leverage.

Record Performance Over Nine Months

For the nine months ended December 2025, TVS Motor posted solid cumulative growth. Operating revenue increased by 29% to ₹34,463 crore, compared with ₹26,701 crore in the corresponding period last year.

During the same period, operating EBITDA rose 41% to ₹4,406 crore. Profit after tax (PAT) for the nine-month period stood at a strong ₹2,625 crore, underlining sustained profitability across business segments.

Vehicle Sales Touch All-Time High

TVS Motor achieved its highest-ever quarterly vehicle sales in Q3 FY26. Total two-wheeler and three-wheeler sales, including international operations, grew 27% YoY to 15.44 lakh units, compared with 12.12 lakh units in the same quarter last year.

Key Segment-Wise Sales Highlights

• Motorcycles: Sales rose 31% to 7.26 lakh units, up from 5.56 lakh units in Q3 FY25.
• Scooters: Sales increased 25% to 6.14 lakh units, compared with 4.93 lakh units a year ago.
• International two-wheeler business: Volumes grew 35% YoY to 3.66 lakh units.
• Three-wheelers: Sales more than doubled, rising 106% to 0.60 lakh units, from 0.29 lakh units in the year-ago quarter.

Electric Vehicle Sales Gain Momentum

The company’s electric vehicle (EV) segment continued its strong growth trajectory. EV sales jumped 40% YoY, reaching a record 1.06 lakh units in Q3 FY26, compared with 0.76 lakh units in the same quarter last year. This growth highlights rising consumer adoption of electric mobility and TVS Motor’s expanding EV portfolio.

Outlook

With record sales volumes, improving margins, and strong demand across domestic and international markets, TVS Motor has entered the second half of FY26 on a solid footing. Continued focus on electric vehicles, exports, and premium offerings could support sustainable growth going forward.

Disclaimer: The views and investment tips expressed in this article are for informational purposes only and do not represent financial advice. The views expressed are those of the sources cited and not necessarily those of this website or its management. Investing in equities or other financial instruments carries the risk of financial loss. Readers must exercise due caution and conduct their own research before making any investment decisions. We are not liable for any losses incurred as a result of decisions made based on this article. Please consult a qualified financial advisor before making any investment.

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India–EU Free Trade Deal Signed: What It Means for Exports and Stock Market

India–EU Free Trade Agreement Sealed: A Landmark Boost for Exports Amid Global Trade Tensions

India and the European Union have formally concluded a long-awaited free trade agreement (FTA), calling it a “landmark” pact that could significantly reshape bilateral trade ties. Prime Minister Narendra Modi described the deal as the “mother of all agreements,” underlining its strategic importance at a time when global trade is facing heightened uncertainty.

The agreement comes as India looks to diversify its export markets following the imposition of steep tariffs by the United States last year. With the EU representing nearly 25% of global GDP and about one-third of global trade, the deal offers Indian exporters access to one of the world’s largest and most affluent markets.

A Market of Two Billion People

The India–EU FTA is expected to create a combined market of nearly 2 billion consumers, strengthening economic cooperation between the two partners. According to Prime Minister Modi, the pact will complement India’s recent trade agreements with the United Kingdom and the European Free Trade Association, further broadening the country’s global trade footprint.

Addressing industry stakeholders, Modi highlighted that labor-intensive sectors stand to gain the most from the agreement.

Key Indian Sectors Likely to Benefit

• Textiles and garments
• Gems and jewelry
• Leather goods and footwear
• Engineering and manufacturing exports

Lower tariffs, improved market access, and streamlined trade rules are expected to enhance the competitiveness of Indian products across Europe.

Strategic Timing Amid U.S. Tariffs

The timing of the deal is critical for New Delhi. Since August last year, Indian exports to the U.S. have been impacted by punitive tariffs of up to 50% on select goods. As the U.S. remains India’s largest export destination, the tariffs have pushed policymakers to actively pursue alternative markets.

This agreement marks India’s fourth major trade pact since those tariffs were imposed, following deals with the U.K., Oman, and New Zealand. While experts note that the EU deal cannot fully replace the scale of trade with the U.S., it provides a vital cushion against external shocks.

Current Trade Snapshot: India and the EU

Trade flows between India and the EU have been steadily growing. In 2024, total goods trade between the two stood at over €120 billion (approximately $140 billion), making the EU India’s largest trading partner.

India’s Major Exports to the EU

• Machinery and appliances
• Chemicals
• Base metals
• Mineral products
• Textiles

On the other hand, the EU’s exports to India are dominated by machinery, transport equipment, and chemical products.

Despite this strong linkage, India accounts for only 2.4% of the EU’s total goods trade, far behind the bloc’s largest partners such as the U.S. and China. Analysts believe the new FTA could gradually narrow this gap.

Trade Balance and Future Outlook

In 2024, India recorded a goods trade surplus of $45.8 billion with the U.S., compared with a lower surplus of $25.8 billion with the EU. While the U.S. remains irreplaceable in the near term, improved access to European markets could help India rebalance its export strategy.

European leaders have emphasized a renewed focus on cooperation, sustainability, and fair trade, signaling a favorable environment for long-term India–EU economic engagement.

Details of tariff reductions, services access, and regulatory alignment are expected to be unveiled following the India–EU summit, where both sides are set to issue a joint statement.

Disclaimer: The views and investment tips expressed in this article are for informational purposes only and do not represent financial advice. The views expressed are those of the sources cited and not necessarily those of this website or its management. Investing in equities or other financial instruments carries the risk of financial loss. Readers must exercise due caution and conduct their own research before making any investment decisions. We are not liable for any losses incurred as a result of decisions made based on this article. Please consult a qualified financial advisor before making any investment.

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Gold at Record High Above $5,000/oz, Silver Hits New Peak: What Lies Ahead?

Gold Hits Record Above $5,000/oz, Silver Scales New Peak: What Investors Should Watch Next

Gold prices surged to an unprecedented milestone on Monday, crossing the $5,000 per ounce mark for the first time in history. The rally reflects heightened demand for safe-haven assets as global investors respond to geopolitical risks, policy uncertainty, and shifting expectations around interest rates. Silver also joined the rally, scaling fresh lifetime highs and outperforming gold on a percentage basis.

Gold and Silver Extend Historic Rally

In international markets, spot gold advanced 1.79% to trade around $5,071.96 per ounce, after touching an intraday high of $5,085.50. US gold futures for February delivery moved in tandem, rising to approximately $5,068.70 per ounce.

Silver prices posted an even sharper move. Spot silver jumped 4.57% to $107.65 per ounce, after hitting a record high of $108.60. The strong momentum in silver highlights increased speculative interest and its dual appeal as both a precious and industrial metal.

Key Drivers Behind the Precious Metals Surge

The latest rally builds on a strong long-term trend. Gold prices have already climbed 64% during 2025 and have added more than 17% so far in 2026. Several structural and near-term factors continue to support prices:

• Safe-haven demand: Rising geopolitical tensions and global trade uncertainties have pushed investors toward defensive assets.
• Monetary policy easing: Expectations of lower interest rates in the United States have reduced the opportunity cost of holding non-yielding assets like gold.
• Central bank buying: Strong and consistent gold purchases by central banks, including continued buying by China, have provided a firm demand base.
• ETF inflows: Record inflows into gold-backed exchange-traded funds have reinforced upward momentum.

Domestic Market Update

In India, the Multi Commodity Exchange (MCX) remained closed on Monday due to Republic Day. However, domestic prices have already reflected the global surge.

Over the past week, MCX gold futures jumped by ₹13,520, or 9.5%, reaching an all-time high of ₹1,59,226 per 10 grams. Silver prices rose even more sharply, surging by ₹46,937, or 16.3%, to cross the ₹3 lakh per kilogram mark for the first time.

What Lies Ahead for Gold and Silver?

Analysts expect bullion prices to remain firm in the near term, with volatility likely around key global events. Market participants are closely tracking the upcoming US Supreme Court hearing related to trade tariffs, as well as the next interest rate decision by the US Federal Reserve.

Domestically, attention will shift to the Union Budget 2026, scheduled for February 1. Any changes in import duties, taxation, or fiscal measures could influence sentiment in the Indian bullion market.

Experts suggest that the broader trend for precious metals remains positive, and any short-term corrections may attract buying interest. Investors will also monitor inflation data from major economies, trade indicators from China, and commentary from global central bank officials for further cues.

Conclusion

With gold above $5,000 per ounce and silver at record highs, precious metals have firmly established themselves as key assets in an uncertain global environment. While short-term fluctuations are inevitable, the underlying fundamentals continue to support a bullish outlook.

Disclaimer: The views and investment tips expressed in this article are for informational purposes only and do not represent financial advice. The views expressed are those of the sources cited and not necessarily those of this website or its management. Investing in equities or other financial instruments carries the risk of financial loss. Readers must exercise due caution and conduct their own research before making any investment decisions. We are not liable for any losses incurred as a result of decisions made based on this article. Please consult a qualified financial advisor before making any investment.

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RBI Announces Major Liquidity Push to Support Rupee and Rate Transmission

The Reserve Bank of India has unveiled a fresh and sizeable liquidity infusion plan aimed at strengthening banking system liquidity and improving the effectiveness of past interest rate cuts. The measures come at a time when the rupee remains under pressure and market participants are seeking durable surplus liquidity.

Details of RBI’s Liquidity Measures

The central bank has announced three separate operations that together are expected to inject nearly ₹1.92 lakh crore into the financial system over the coming weeks.

• Open Market Operations (OMO): RBI will purchase government securities worth ₹1 lakh crore in two tranches of ₹50,000 crore each, scheduled for February 5 and February 12.
• Dollar-Rupee Buy-Sell Swap: A three-year swap of $10 billion will be conducted on February 4, infusing close to ₹92,000 crore of rupee liquidity.
• Variable Rate Repo: A 90-day repo operation amounting to ₹25,000 crore is slated for January 30.

These steps are designed to move system liquidity into a sustained surplus and ensure that earlier policy rate reductions are transmitted more effectively to lending and deposit rates.

Current Liquidity Position

Despite recent interventions, liquidity levels have remained modest. System liquidity averaged a surplus of ₹57,120 crore in January so far, compared with ₹72,549 crore in December.

Measured as a share of net demand and time liabilities (NDTL), liquidity stood at just 0.2% in January, down from 0.3% in December. Market participants believe this level is insufficient to drive strong credit growth or meaningful rate transmission.

Market Expectations and Outlook

Economists expect the latest measures to significantly improve liquidity conditions. Based on current estimates, the new operations could lift liquidity to around 0.9% of NDTL, provided there is no major absorption due to foreign exchange market interventions.

Analysts also anticipate that the central bank may need to continue open market purchases in the coming months. Expectations are building for additional OMOs during February and March, with further liquidity support likely in the next financial year.

Link to Monetary Policy Decision

The liquidity announcement comes just ahead of the upcoming monetary policy review, with the policy decision scheduled for February 6. Market participants see the measures as a clear signal that the central bank is focused on supporting growth while managing currency volatility.

Why This Matters for Investors

Improved liquidity typically lowers borrowing costs, supports bond prices, and enhances credit availability. For equity markets, durable surplus liquidity often acts as a positive trigger by improving risk appetite and easing financial conditions.

As the rupee faces global headwinds and domestic growth remains a priority, the RBI’s aggressive liquidity stance is being viewed as a proactive step to stabilize markets and reinforce monetary policy transmission.

Disclaimer: The views and investment tips expressed in this article are for informational purposes only and do not represent financial advice. The views expressed are those of the sources cited and not necessarily those of this website or its management. Investing in equities or other financial instruments carries the risk of financial loss. Readers must exercise due caution and conduct their own research before making any investment decisions. We are not liable for any losses incurred as a result of decisions made based on this article. Please consult a qualified financial advisor before making any investment.

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