Gold, silver futures surge to fresh peaks on weak dollar, Fed rate-cut hopes; precious metals rise by up to 18% during the week

Gold and silver prices, after falling on Thursday due to easing geopolitical tensions and profit-booking, rallied on Friday to fresh peaks, tracking record gains in the overseas markets.

Gold futures for February expiry hit a lifetime high of ₹1,59,226 per 10 gram on the Multi Commodity Exchange (MCX), rising by 1.8% from Thursday’s closing price of ₹1,56,341 per 10 gram. Meanwhile, silver futures for March delivery soared by 3.8% to a new record of ₹3,39,927 per kg, after settling at ₹3,27,289 per kg on Thursday on the MCX.

During the week, gold futures have surged by as much as 11.7% from last Friday’s closing price of ₹1,42,517 per 10 gram. Silver futures, on the other hand, have added ₹52,165 in just one week, rising by 18.1% from ₹2,87,762 per kg on Friday, January 16.

Gold and silver bull run: Key reasons

During the week, the precious metals rose due to heightened geopolitical tensions. Both gold and silver are safe-haven metals; they rise in uncertain situations, like global concerns, falling currencies and fluctuating markets.

Due to US President Donald Trump’s threat to impose tariffs on goods from European nations, bullion prices soared to new highs. On Thursday, January 22, President Trump withdrew his threat to impose tariffs, saying that a deal regarding Greenland has been established.

On Friday, January 23, a weaker US dollar and rising expectations of interest rate cuts by the US Federal Reserve supported bullion prices. "Gold's surge to record highs on the MCX reflects a powerful convergence of global risk factors and macroeconomic tailwinds," a PTI report quoted Rahul Gupta, Chief Business Officer – Ashika Group, as saying.

Market participants are increasingly pricing in the likelihood of rate cuts by the US Fed, which has further reduced the opportunity cost of holding non-yielding assets such as gold, he added.

International markets

In the overseas markets, both gold and silver futures soared to lifetime highs on Friday. The white metal crossed the $99 per-ounce mark for the first time on the Comex, while gold neared the crucial $5,000-per-ounce mark.

Silver futures for March delivery advanced to a new peak of $99.39 per ounce, rising by $3.02 (3.14%). Comex gold futures gained 1.15% ($56.6) to grow to a record high of $4,970 per ounce.

The dollar index, which measures the greenback's strength against a basket of six currencies, was trading 0.05% lower at 98.31. "Market sentiment was further influenced by President Donald Trump's statement that he had secured permanent US access to Greenland through a NATO deal, though details remain unclear and Denmark has reiterated its sovereignty," the PTI report quoted Renisha Chainani, Head - Research at Augmont, as saying.

"Expectations of monetary easing have also grown, as Trump is expected to appoint the next Federal Reserve Chair, with markets pricing in a more dovish candidate. Silver's sharp rally has been amplified by a historic short squeeze, strong retail participation, and China's tightening export controls, adding to supply concerns," she added.