Gold prices extended gains for the third straight session, with February futures on the MCX rising another 9% or ₹15,000 per 10 grams to a fresh record high of ₹1,80,799 per 10 grams, crossing the ₹1.80 lakh mark for the first time. The rally has pushed prices up by 31% so far in January.
In the international market, spot gold prices topped $5,600 per troy ounce, taking the month-to-date surge to 30%. In the previous session, spot prices closed 4.6% higher, marking the biggest one-day gain since the peak of the Covid-19 pandemic in March 2020.
Silver prices have also made a sharp jump, with the March silver futures contract gaining ₹34,682 per kilogram on MCX, registering another historic high of ₹4,20,048, crossing the ₹4 lakh mark for the first time.
Impressively, the white metal has crossed both ₹3 lakh and ₹4 lakh in under a month, taking the month-to-date gains to 78.21% or ₹1.84 lakh.
Geopolitical tensions, falling US dollar aid rally
The sustained rally suggests that investors continue to flock to safe-haven assets as geopolitical tensions remain elevated, keeping the appeal of precious metals intact.
Tensions in the Middle East have resurfaced after US President Donald Trump warned Iran to strike a nuclear deal or face possible military action. Trade concerns have also kept prices elevated after Trump threatened South Korea and Canada with additional tariffs.
Despite the US Federal Reserve holding interest rates on Wednesday, as widely expected, market focus has shifted to growing expectations that Trump will soon announce his pick for Fed chair, alongside his prediction that interest rates will fall once the new chair takes over.
The rally has further been supported by concerns over the independence of the US Federal Reserve, which has reinforced the debasement trade.
A weakening US dollar has also aided the gold and silver rally, with the dollar index touching a four-year low earlier this week. Trump has said he is not concerned about the recent decline in the world’s reserve currency.
In addition, reports suggesting that global funds are moving out of US markets amid uncertainty over Trump’s economic policies have added pressure on the dollar.
Gold at ₹2 lakh soon?
With today’s rally, gold is just ₹19,201 away from the ₹2 lakh milestone, and analysts expect the price could achieve this level in the near term.
Ponmudi R, CEO of Enrich Money, said, “A clear and sustained breakout above the ₹1,80,000 band could quickly open the path toward ₹1,85,000– ₹1,90,000, with a psychological extension toward ₹2,00,000 increasingly likely if global momentum sustains. Overall, the bias remains strongly bullish, with the trend firmly in control.”
Disclaimer: This story is for educational purposes only. The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before making any investment decisions.
