The Whiplash Economy

February 09, 2026

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Good Morning. If you thought gold and silver are where you hide when markets got shaky, the last week has been a rude awakening. Crypto cracked, tech stocks imploded, and now even the so-called safe havens are swinging like meme assets. In the new market regime, volatility is no longer an exception.

In other news, foreign portfolio investments (FPI) look upbeat in February. Meanwhile, India’s new fuel emission rules reportedly won’t have concessions for small cars.

Gold And Silver Havens Crumble In New Era Of Market Volatility

Market gravity has a way of reasserting itself, often without warning or a clear explanation. 

Just ask the crypto faithful. 

Bitcoin, an asset we don’t track much and for good reason, recently suffered its largest weekly decline in over three years, tumbling 16% to $70,008, a staggering 45% retreat from its October peak of $126,273. 

The most unsettling part for the permabulls? No one is quite sure what went wrong, reports the Wall Street Journal.

While the Dow Jones Industrial Average — that bastion of blue-chip industrials like Walmart and Boeing — crossed the 50,000 threshold for the first time this past week, the broader tech landscape is enduring a trillion-dollar wipeout. 

This rout, rippling through Silicon Valley's stocks and bonds, is the most severe since the launch of ChatGPT. Software stocks are at the epicentre; an iShares ETF tracking the sector has bled nearly $1 trillion in value in just seven days.

The catalyst isn't just bubble talk. It is a fundamental anxiety over how new AI tools — specifically recent revelations from Anthropic — might dismantle the traditional business models of IT services companies.

Tarnished Silver Lining

India has been lucky to escape the AI trade wave of the last three years. 

We say lucky because Indian markets and their investors have not been exposed to the wild gyrations that one often sees on Wall Street. 

That luck ran dry in the last few weeks in the metals market, and Indian investors who moved into gold and silver are currently being treated to the rollercoaster ride of their lives. 

While much of India’s holdings in these metals are shielded in physical jewellery, the paper side of the trade is in a tailspin:

Silver erased a two-day recovery to fall 17% on Thursday. After briefly touching $90 an ounce, it has retreated by more than a third from its January 29 high.

In Indian markets, the falls are even more pronounced. Gold and Silver ETFs crashed 20% on Thursday, reflecting a massive exodus of speculative funds.  

Silver exchange-traded funds (ETFs) have fallen 38% from their all-time peak hit just seven trading sessions ago on January 29.

It is worth noting that these Indian ETFs had very few assets under management a year ago. 

Safe Havens No More

Today, they are filled with millions of small investors — a shoal of fish darting between trades, mostly led by the unresearched noise of social media.

And while retail investors scramble like fish, the sharks are moving in. 

Bian Ximing, a billionaire trader, made $3 billion riding gold’s rally and has reportedly built a $300 million short position against silver on the Shanghai Futures Exchange, says a report in Bloomberg. 

When the sharks bet against you, the outcome is mostly not a good one.

The broader lesson is that we are in extremely uncertain territory. 

Volatility is no longer confined to stocks or bonds; it has infected the traditionally safe havens of gold and silver. 

Hold Assets, Not Hype

Swings are deeper, sharper, and more punitive. 

On Wall Street, even a minor earnings miss is treated as a catastrophe. 

Indian markets have historically been more forgiving, but the Wall Street whiplash is now extending to global asset classes, as we are seeing with gold and silver.

The bottom line is as old as the hills: Investors must exercise considerable caution. The composition of the market has changed, and with it, the stability of even the most traditional stocks. 

Leave the speculation to the professionals —  the ones with the MIT degrees and the algorithms — who are sitting thousands of miles away. 

For everyone else, it’s time to focus on assets you actually intend to keep.

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$975 million

That’s how much foreign portfolio investors have poured into Indian equities, equivalent to about Rs 8,100 crore, in the first week of February, reversing a months-long selling streak. This buying came in the same week that US President Donald Trump announced that India and the US have finalised a long-pending free trade agreement, which had been stuck for around 18 months.

FPI flows in recent months: 

  • January ‘26: Net outflow of $4.3 billion

  • December ‘25: Net outflow of $2.7 billion

  • November ‘25: Net outflow of $450 million

Total FPI investment in 2025: Net outflow of $18.9 billion. 

Analysts said that the renewed buying reflects an improved confidence in India’s medium-term growth outlook and a higher appetite for risk. They said expectations of policy continuity, stable macroeconomic conditions and easing inflation have made Indian equities more attractive at current valuations. The announcement of the US-India trade deal also boosted sentiment, particularly for export-oriented sectors.

Flashpoint: However, analysts cautioned that the trend remains fragile. They said global interest rate expectations and currency movements will continue to influence foreign flows, and sustained inflows will depend on follow-through in earnings growth and trade execution.

Small Cars, Tight Rules

India has dropped a concession it planned to grant small petrol cars under the upcoming fuel-efficiency rules, Reuters reported in an exclusive. Carmakers Tata Motors and Mahindra & Mahindra raised objections, arguing the exemption would disproportionately benefit Maruti Suzuki, which dominates the small-car segment.

Setup: The decision contrasts with last year’s GST cuts, which helped revive demand for entry-level hatchbacks by lowering upfront costs and pulling price-sensitive buyers back into showrooms. As The Core reported, that tax relief boosted volumes but did not resolve deeper affordability pressures.

Critical Moment: Together, the two moves highlight a policy mix that supports short-term demand while tightening long-term regulatory requirements for small petrol cars.

Crude Calculus

Indian refiners have quietly pulled back from fresh Russian crude purchases as New Delhi advances trade negotiations with Washington, sources told Reuters. State-run refiners and private players have declined spot offers for March and April cargoes, even as Russian sellers continue to dangle discounts. 

Flashpoint: The shift follows a steady drop in Russian oil imports since mid-2025 and coincides with efforts to unlock tariff relief and broader market access under a proposed US-India trade deal. Sources said refiners have received no formal government directive, but have recalibrated buying strategies to avoid sending the wrong signals during talks. 

Backdrop: India continues to lift Russian crude under existing contracts, while increasingly sourcing barrels from the Middle East and the US, using oil flows as quiet leverage in trade negotiations.

India-Malaysia Ties

Indian Prime Minister Narendra Modi wrapped up a two-day visit to Malaysia, where he and Malaysian Prime Minister Anwar Ibrahim recommitted to expanding trade, security and technology cooperation.

Fast Facts: The leaders moved to deepen their Comprehensive Strategic Partnership, elevated in August 2024, and signed 11 agreements spanning semiconductors, disaster management, peacekeeping and defence. They set an ambition to push bilateral trade beyond last year’s $18.6 billion and promote local-currency settlements. Malaysia also backed India’s plan to open a consulate in Sabah, in eastern Malaysia.

Outcome: Modi highlighted shared priorities including counter-terrorism, food security and healthcare, while underscoring people-to-people ties anchored by Malaysia’s large Indian diaspora, as both countries look to strengthen their footing in the Indo-Pacific.

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