Silver prices soared to a historic peak on Monday, breaking through the Rs 3 lakh-per-kilogram barrier in futures trading for the very first time. Gold also staged a strong comeback, bouncing back from losses recorded last week.
Record-Breaking Surge on MCX
On the Multi Commodity Exchange, silver futures contracts skyrocketed by Rs 13,553. This jump of 4.71% propelled prices to an unprecedented Rs 3,01,315 per kilogram. Gold futures followed suit, climbing nearly Rs 3,000. The increase of over 2% pushed gold to a fresh all-time high of Rs 1,45,500 for every 10 grams.
Geopolitical Tensions Fuel the Rally
The sharp rally in precious metals came after renewed geopolitical worries rattled markets. US President Donald Trump threatened to impose additional tariffs on several European nations concerning Greenland. In response, the European Union is reportedly preparing retaliatory tariffs valued at a massive €93 billion. These renewed tensions revived investor appetite for safe-haven assets like gold and silver. Just last week, easing friction between the US and Iran had briefly reduced interest in these metals.
Global Markets Also Touch New Highs
International markets mirrored this bullish trend. Spot gold prices increased by 1.7% to reach $4,673 per ounce. Silver climbed approximately 3% to about $94 per troy ounce, setting new records overseas. Silver futures in international markets leaped more than 6% to a record $94.35 per ounce.
Analysts Point to Multiple Drivers
Market analysts noted that silver has been outperforming gold in recent trading sessions. They attribute this strength to robust industrial demand and favourable global trends. Some experts also highlighted currency movements as a contributing factor. The dollar index rose for a third consecutive week, closing at 99.20. Meanwhile, the USD-INR January 28 futures contract ended higher at 90.8325 on the National Stock Exchange.
Gold's Dynamics Amid Rate Expectations
Gold, which does not provide any interest income, typically gains when interest rates are low. However, current expectations that central banks may delay rate cuts have raised the opportunity cost of holding the yellow metal. Despite this headwind, elevated geopolitical risks have continued to provide solid support for gold prices.
Outlook Remains Volatile
Market participants caution that precious metals could stay volatile in the near term. Prices are likely to be driven by several key factors:
- Developments on the geopolitical front, especially trade tensions.
- Movements in major global currencies.
- Shifts in overall investor risk appetite.
The combination of strong industrial demand for silver and its role as a safe-haven asset suggests the rally may have further room to run, depending on global events.
