After a spectacular year-long rally that saw prices shatter records, the gold and silver markets concluded 2025 on a subdued note. On the final trading day of the year, investors rushed to lock in profits, triggering a significant correction, particularly in silver.
A Muted Finale After a Glittering Year
The sell-off on Wednesday, December 31, was sharp and pronounced. On the Multi Commodity Exchange (MCX), silver futures for March 2026 delivery plunged by a staggering 6%, tumbling Rs 15,060 to settle at Rs 2,35,952 per kilogram. This marked a steep reversal for the white metal, which had recently scaled unprecedented peaks.
Gold futures, while more resilient, also edged lower. February 2026 gold contracts slipped 0.4%, closing at Rs 1,36,124 per 10 grams. This pause followed a strong rebound in the previous session, where bullion prices had recovered sharply from intraday lows, buoyed by renewed safe-haven buying interest.
Global Cues and Geopolitical Jitters
The profit-taking trend was mirrored in international markets. In early Asian trade, spot gold prices fell 0.3% to hover around $4,334 an ounce, after achieving a historic high of $4,549.71 just last week. Similarly, US gold futures for February delivery declined by 1% to $4,346.50 an ounce.
Market sentiment turned cautious due to escalating geopolitical tensions, which initially supported precious metals as safe havens. Key developments included:
- Russia's allegation of a Ukrainian drone attack on the President’s residence, dampening hopes for a swift peace resolution.
- Reports of US airstrikes on a Venezuelan dock.
- A Chinese military exercise in waters near Taiwan.
Despite the year-end pullback, both gold and silver are poised to register historic annual gains for 2025, underscoring the powerful bullish trend that dominated most of the year.
Expert Outlook and Technical Levels for 2026
Manoj Kumar Jain, Head of Commodity Research at Prithvifinmart, provided insights into the road ahead. He noted that while geopolitical developments continue to offer short-term support to bullion prices, significant headwinds are emerging.
The US Federal Reserve's meeting minutes, released on Tuesday, reduced market expectations for aggressive interest rate cuts in 2026. This, coupled with a steady US Dollar Index holding near 98.28, could limit the upside potential for gold and silver in the near term.
Jain outlined crucial technical levels for traders on the MCX:
For Gold (February 2026):
- Support: Rs 1,35,200 – Rs 1,34,000 per 10 grams.
- Resistance: Rs 1,37,700 – Rs 1,39,200 per 10 grams.
For Silver (March 2026):
- Support: Rs 2,40,000 – Rs 2,28,000 per kg.
- Resistance: Rs 2,62,000 – Rs 2,75,000 per kg.
Given the heightened market volatility, Jain advised investors to wait for clearer price stability before initiating fresh positions and to strictly avoid short-selling strategies for now.
