Gold prices this week: Yellow metal rises 2% amid weakening rupee, global trends

Gold prices rallied 2% beaching ₹81,000 per 10-gram level this week to hit the highest value in more than two months. The precious metal increased by ₹1,630 over the last one week after a three-day rally to Friday on favourable global trends. The 24K gold traded at ₹81,270 per 10 gram in major Indian cities on Friday.

Silver prices also zoomed 3.2% in the last one week to trade above ₹96,000 per kilogram, a level not seen since December 11, 2024. The white metal traded at ₹96,500 per kg on Friday, up by ₹3,000 over the past week.

Domestic prices

Gold prices opened the week on a firm note and advanced by ₹430 per 10 gram to breach ₹80,000 per 10 gram for the first time since November 7, 2024, on Monday following a sharp drop in the Indian rupee against the US dollar.

The precious metal dropped by ₹110 per 10 gram on Tuesday as surging US bond yields and a firm dollar hit the appeal of the non-yielding asset. The metal rebounded on Wednesday to regain ₹80,000 level after weak US inflation data.

Gold rallied for the next two days to Friday to hit ₹81,000 on blistering rate cut hopes. The 24K gold gained a total of ₹1,630, or 2% this week. The 22K gold rose by ₹1,500 to trade at ₹74,500 per 10 gram on Friday.

Silver rallies over 3% this week

Silver prices rallied over 3% or by ₹3,000 per kg this week to trade at ₹96,500 per kg on Friday. Silver prices rose by ₹1,000 per kg on Monday due to the rupee falling to record low levels. The white metal declined by ₹2,000 per kg to ₹92,500 per kg on Tuesday as a strong dollar hit its appeal.

The metal rebounded on the next three straight days to Friday and hit a monthly high, reaching ₹96,500.

International prices

Spot gold in global markets hit the one-month high levels to trade above $2,700 an ounce this week. The precious metal started the week at near $2,650 an ounce but bulls remained active at every fall and took the metal above $2,700 an ounce on Thursday.

Spot gold traded at $2,712 an ounce on Friday, up by around 2% over the last week.

Moderate US inflation, weaker rupee key triggers for gold

Gold prices surged to over two-month highs in domestic markets in tandem with firm spot gold in global markets.

The major push came from the US CPI data, which was in line with expectations at 2.9% (MoM) for December. However, a lower-than-expected Core consumer inflation number (MoM) for December at 0.2% against 0.3% raised hopes of a rate cut by the US Fed and provided support to gold prices.

The rupee declined to an all-time low of 86.7 levels against the US dollar this week due to continuous foreign fund outflows from the Indian capital markets. The decline in the rupee aided the precious metal as a weaker rupee makes gold imports costlier, which impacts its retail prices.

Meanwhile, firm US bond yields and a stronger dollar are still capping the gains of gold even as expectations of further gains in the US dollar remain dim. A strong dollar hit the appeal of non-yielding gold metal.