Precious metals maintained their upward trajectory for the fourth consecutive trading session on Tuesday, 6 January, inching closer to their all-time peaks. While the rally was less aggressive than the previous day, both gold and silver built on their recent gains, driven by a potent mix of geopolitical uncertainty and shifting monetary policy expectations.
Metals March Higher: A Look at the Numbers
On the Multi Commodity Exchange (MCX), gold futures for February delivery advanced by 0.50%, or ₹656, to hit an intraday high of ₹1,38,776 per 10 grams. This brings the yellow metal within striking distance of its historic peak of ₹1.4 lakh. The session's gain follows a substantial jump of ₹2,359 on Monday, contributing to a cumulative four-day rise of 2.30%.
The rally in silver was even more pronounced. After a massive surge of ₹9,839 per kilogramme on Monday, silver prices climbed another ₹6,025 to reach a day's high of ₹2,52,180 per kg. This price level is tantalisingly close to the metal's all-time high of ₹2,54,174, with the four-day rally now amounting to nearly 7%.
The bullish sentiment extended to other precious metals as well. Spot platinum rose by 3.56% to $2,356 per ounce, and palladium gained 3% to $1,752. These metals, critical for automotive catalytic converters, are benefiting from tight supply conditions, uncertainty around tariffs, and a shift in investment demand from gold.
Geopolitics and Fed Policy Fuel the Rally
The primary engine behind this sustained rally is heightened safe-haven demand triggered by escalating geopolitical tensions. Recent US military actions in Venezuela, resulting in the capture of President Nicolás Maduro and his wife, have injected significant uncertainty into global markets, prompting investors to seek refuge in traditional stores of value like gold and silver.
Concurrently, the rally is drawing substantial support from the monetary policy landscape. Growing expectations that the US Federal Reserve may maintain a loose monetary stance in 2026 have been reinforced by recent economic data. Traders are currently factoring in two interest rate cuts by the Fed this year. A lower interest rate environment diminishes the opportunity cost of holding non-yielding assets like bullion, making them more attractive to investors.
Analyst Outlook: Volatility with an Upward Bias
Market experts believe the uptrend for gold remains intact, albeit with expected volatility. Jateen Trivedi, VP Research Analyst - Commodity and Currency at LKP Securities, highlighted the role of risk sentiment. "Risk sentiment continues to favour higher allocation toward gold amid renewed geopolitical tensions," Trivedi stated, pointing specifically to the events in Venezuela.
"These developments are keeping safe-haven demand firm," he added. Providing a near-term forecast, Trivedi said, "Gold is expected to remain volatile but biased upward, with a trading range seen between ₹1,37,000 and ₹1,42,000." This analysis suggests that while prices may fluctuate, the overall momentum is likely to remain positive for the precious metal.
As the markets digest ongoing geopolitical developments and central bank signals, investors are advised to monitor the situation closely and consult with certified experts before making any investment decisions.
