It was a remarkable day for precious metals, with both gold and silver reaching unprecedented heights. Investors turned to bullion in anticipation of interest rate cuts in the U.S. and increasing global tensions. Silver, in particular, led the surge, achieving record gains for the fifth consecutive session, while gold also set a historic milestone in domestic markets.
Silver Soars to New Heights
Silver futures for the March 2026 contract surged by Rs 8,951, or 4%, hitting an all-time high of Rs 2,32,741 per kg on the Multi Commodity Exchange (MCX). This impressive rise follows an increase of Rs 29,176, translating to over 14%, since December 18. The white metal’s ascent was further supported by its breakthrough past the $75-per-ounce mark in global markets for the first time. The ongoing demand for silver reflects a broader trend among investors looking for safe-haven assets amid rising geopolitical uncertainties.
Gold Achieves Historic Milestone
Gold also witnessed a significant uptick, climbing for the fourth consecutive session. MCX gold futures for February delivery rose by Rs 1,119, or 0.81%, reaching a new lifetime high of Rs 1,39,216 per 10 grams. This surge occurred after commodity markets were closed on Thursday for the Christmas holiday. The rally extended internationally, with gold futures on the Comex for February delivery increasing by $58.8, or 1.3%, to a peak of $4,561.6 per ounce. Analysts attribute this surge to heightened safe-haven demand driven by geopolitical tensions and expectations of interest rate cuts from the U.S. Federal Reserve.
Geopolitical Tensions and Economic Factors
Jigar Trivedi, a Senior Research Analyst at Reliance Securities, noted that the rise in gold prices is largely influenced by safe-haven demand amid escalating geopolitical tensions. He pointed to ongoing issues such as the U.S. blockade of crude shipments from Venezuela, the Russia-Ukraine conflict, and recent military actions against ISIS in Nigeria. Additionally, markets are anticipating two quarter-point rate cuts from the Federal Reserve next year as inflation seems to be cooling and labor market conditions soften. Despite some division among Fed officials regarding future monetary policy, the overall sentiment remains bullish for precious metals.
Future Outlook for Precious Metals
Looking ahead, Trivedi mentioned that gold prices have surged more than 70% this year, marking the largest annual gain since 1979. This growth is supported by strong central bank purchases and sustained inflows into exchange-traded funds (ETFs). Market experts predict the rally could continue into early 2026, bolstered by easing inflation, a weaker dollar, and ongoing geopolitical risks. Manoj Kumar Jain from Prithvifinmart Commodity Research indicated that gold is likely to maintain its position above the critical $4,500 level, with potential targets of $4,890, while silver may stabilize above $70, eyeing $78 in the near future. The U.S. Dollar Index remains subdued, which could further support the positive outlook for gold and silver in the coming sessions.
Digihunt is not a financial advisor and this is not investment advice.