Gold prices have continued their impressive upward trajectory, marking gains for the third consecutive session on the Multi Commodity Exchange (MCX). The February futures contract for gold witnessed a substantial rise of 9%, equivalent to ₹15,000 per 10 grams, reaching a fresh record high of ₹1,80,799 per 10 grams. This milestone represents the first time gold has crossed the ₹1.80 lakh threshold, underscoring a robust rally that has propelled prices up by an impressive 31% so far in January.
International Market Performance
In the global arena, spot gold prices have also shown remarkable strength, topping $5,600 per troy ounce. This surge translates to a month-to-date increase of 30%, highlighting a synchronized upward movement across markets. Notably, in the previous trading session, spot prices closed 4.6% higher, marking the most significant one-day gain since the peak of the Covid-19 pandemic in March 2020.
Silver Joins the Rally with Historic Highs
Silver prices have not been left behind in this precious metals boom. The March silver futures contract on MCX experienced a sharp jump, gaining ₹34,682 per kilogram to register another historic high of ₹4,20,048. This achievement marks the first time silver has crossed the ₹4 lakh mark, following an earlier breakthrough past ₹3 lakh in under a month. The month-to-date gains for silver stand at an astonishing 78.21%, or ₹1.84 lakh, reflecting intense investor interest.
Drivers Behind the Sustained Rally
The sustained rally in gold and silver prices suggests that investors are increasingly flocking to safe-haven assets amid elevated geopolitical tensions. Recent developments in the Middle East, including warnings from US President Donald Trump to Iran regarding a nuclear deal and potential military action, have resurfaced concerns. Additionally, trade tensions have kept prices elevated, with Trump threatening South Korea and Canada with additional tariffs.
Despite the US Federal Reserve holding interest rates steady on Wednesday, as widely anticipated, market focus has shifted. Growing expectations that Trump will soon announce his pick for the next Fed chair, coupled with his prediction that interest rates will fall under new leadership, have added to the uncertainty.
Support from Currency and Policy Concerns
The rally has been further bolstered by concerns over the independence of the US Federal Reserve, reinforcing the debasement trade. A weakening US dollar has also played a crucial role in supporting the gold and silver surge, with the dollar index touching a four-year low earlier this week. Trump has stated he is not concerned about the recent decline in the world's reserve currency.
Moreover, reports indicating that global funds are moving out of US markets amid uncertainty over Trump's economic policies have added downward pressure on the dollar, enhancing the appeal of precious metals as alternative investments.
Analyst Predictions: Gold at ₹2 Lakh Soon?
With today's rally, gold is now just ₹19,201 away from the ₹2 lakh milestone, and analysts are optimistic about achieving this level in the near term. Ponmudi R, CEO of Enrich Money, commented, "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.
