Gold surges over 2% to surpass ₹86,000 per 10 grams this week

Gold prices zoomed 2.39%, or around ₹2,000 per 10 grams, to breach the ₹86,000 per 10 grams level for the first time this week following firm local demand and a pull-back in the US dollar.

In global markets, the precious metal breached the $2,800 an ounce level for the first time this week and soared further to hit an all-time high of $2,882 an ounce in the spot markets.

The metal in domestic markets moved in sync with global trends this week and provided returns of over 2% to investors, marking its seventh straight week of gains.

The 24K gold had settled at ₹77,620 per 10 grams and the 22K gold at ₹71,150 per 10 grams on December 7, marking a weekly loss of ₹380.

Interestingly, key stock market indices SENSEX and NIFTY have given negative returns in the same period. SENSEX dropped around 4.4% while NIFTY fell 4.3% in seven weeks since December 6, 2024.

Gold rallies for three days in record-setting spree

After a muted start on Monday, gold rallied till Friday in the domestic markets, breaking record-high levels. Gold prices fell by ₹440 on Monday but soon after rebounded on Tuesday by ₹1,150 per 10 grams to breach the ₹85,000 barrier. On the next day, the 24K gold jumped ₹1,040 per 10 grams to cross the record ₹86,000 per 10 grams mark.

Gold added ₹270 on Thursday to an all-time high of ₹86,510 per 10 grams in Mumbai and ₹86,660 in Delhi markets.

The 22K gold also breached the ₹78,000 per 10 grams barrier on Tuesday followed by ₹79,000 mark on Wednesday. The 22K gold hit an all-time high of ₹79,300 per 10 grams in Mumbai and ₹79,450 per 10 grams in Delhi on Thursday. Gold prices maintained record-high levels on Friday as well.

Silver prices slip ₹100 in range-bound trade this week

Silver prices have dropped by ₹100 to ₹96,500 per kg this week in a range-bound trade. Silver generally moves in line with gold prices as both are considered safe-haven investments. However, an increased supply of silver in global markets, expected drop in investment demand and trade war worries hitting metal imports by the largest importer China have kept a lid on silver prices.

Silver prices dropped ₹1,000 per kg on Tuesday but pared losses in the next session to regain the previous levels. The white metal traded flat in the next two days on bouts of buying and selling.

Weak rupee, easing US dollar major drivers for gold

A pull back in US dollar to 107 levels and rising hopes of a rate cut by the US Federal Reserve this year after weak US jobs data helped the gold prices to propel to all-time highs.

US President Donald Trump putting off 25% tariffs on Mexico and Canada by a month following successful talks hit the dollar bulls. The dollar retreated from 109 to 107 levels after the announcement, boosting the appeal of non-yielding asset gold. Some uncertainty around the US trade policy also boosted its safe-haven demand.

The Indian rupee falling to record low levels this week was also a contributing factor to the rally in gold prices. A weak rupee makes imports of US dollar-priced gold dearer.

Revival of marriage season demand also boosted the prices. According to the Hindu calendar, February has 14 auspicious days for events like marriages.