MCX gold and silver close higher this week recovering from last week’s fall; check latest price

This week, gold and silver futures prices for the February contracts increased by 0.57% and 1.33%, respectively, as of 6 pm on Friday, December 27.

Gold futures touched ₹76,836 per 10 gram on Friday, while silver reached ₹89,553 per kg.

The spot price of the yellow metal was at $2,643.46 per ounce in the US markets, up nearly 0.40%. However, silver futures spot price was 0.6% down at $30.2 per ounce.

Key triggers for the rise

Gold is a safe haven, which means that investors turn towards gold when they seek safer investments in times of market volatility and rising geopolitical concerns. The rising tensions in Israel are fueling the appeal of the yellow metal, leading to an upward trend in the prices.

The ongoing wedding season in India, which is only going to scale up in the upcoming months, is aiding the increase in gold prices as the demand for gold jewellery goes up during this season.

This week's rise in gold prices can be attributed to modest gains in the US dollar index compared to baskets of other currencies and rising crises in the Middle East region.

The geopolitical turmoil seen in the Middle East, if heightened, could further boost demand for safe haven assets like gold.

Gold performance in 2024

Gold futures have increased over 21.4% in the last 12 months, as compared to the 14.9% surge seen in 2023. The dramatic increase can be seen due to many factors like rising geopolitical tensions, increasing inflation, market fluctuations and gold held by the central banks, among others.

The easing stance by central banks around the world gave an edge to the yellow metal, aiding its jump. The Russia-Ukraine conflict, and other geopolitical developments, also led to a major increase in gold prices. Inflation concerns globally and the safe haven sheen of gold make the yellow metal appealing to investors.

In the upcoming year, the US Federal Reserve’s stance on interest rate cuts can impact the prices of the precious metal.

Gold returns in the last five years

Gold has given remarkable returns of more than 20% this year so far, outperforming other safe investments like fixed deposits and bonds.

As per ICRA, the domestic gold jewellery consumption is expected to grow by 14-18% in FY25 in value. The primary drivers of increased gold consumption in the current fiscal were positive consumer sentiment and a festive demand for the metal, ICRA suggested in a press release.