Precious Metals Soar to Historic Peaks on MCX as Investors Seek Safety
Silver and gold continued their spectacular upward trajectory on Thursday, achieving record-breaking levels on the Multi Commodity Exchange (MCX). This remarkable surge reflects a powerful flight to safety by investors, who are increasingly turning to traditional safe-haven assets in response to escalating geopolitical uncertainties and supportive monetary policy signals from the United States Federal Reserve.
Unprecedented Price Milestones Achieved
In a historic first for MCX, silver futures spectacularly breached the psychological barrier of Rs 4 lakh per kilogram. Simultaneously, gold futures advanced tantalizingly close to the Rs 1.8 lakh mark per 10 grams. These milestones underscore a profound risk-off sentiment that has gripped global financial markets, driving capital away from riskier assets and into the perceived security of precious metals.
The specific contract movements were equally impressive. MCX gold contracts slated for expiry on February 5, 2026, registered a substantial gain of nearly 6%, climbing by Rs 9,954 to settle at Rs 1,75,869 per 10 grams. Silver futures for March 5, 2026, witnessed an even more dramatic ascent, jumping by Rs 15,414—approximately a 5% increase—to reach a staggering Rs 4,00,780 per kilogram.
Key Drivers Behind the Meteoric Rally
The rally was primarily fueled by two interconnected factors. Firstly, the US Federal Reserve's recent decision to maintain interest rates at current levels, coupled with clear indications that further rate hikes are off the table for the foreseeable future, provided a significant tailwind. Lower interest rate expectations diminish the opportunity cost of holding non-yielding assets like gold and silver, making them more attractive to investors.
Secondly, fresh geopolitical tensions injected additional momentum into the buying frenzy. Safe-haven demand intensified following a stern warning from former US President Donald Trump directed at Iran concerning stalled nuclear negotiations. His statement that "time is running out," accompanied by confirmation of an expanded US military presence in the Gulf region—including what he termed a "massive armada"—heightened market anxieties and spurred further investment into precious metals.
Global Markets Echo the Upward Trend
This bullish sentiment was not confined to Indian markets. International precious metal markets mirrored the surge, with prices scaling unprecedented heights globally. Spot gold leaped nearly 3% to achieve an all-time high of $5,591.61 per ounce, extending its weekly gains to over 10%. Spot silver climbed to $118.061 per ounce, after briefly touching a fresh lifetime peak of $119.34 during the trading session.
Market analysts note that silver, in particular, has benefited from robust spillover demand. Investors seeking relatively more affordable alternatives to gold have turned to silver, amplifying its gains. This trend has been further accelerated by existing tight supply conditions in the silver market and momentum-driven algorithmic buying.
Expert Outlook and Trading Strategy
Manoj Kumar Jain, a partner at Prithvi Finmart, commented on the heightened volatility expected in the precious metals sector in the near term. He attributed this to potential fluctuations in the US dollar index, the release of upcoming US jobless claims data, and the persistent cloud of geopolitical uncertainty.
Jain provided detailed technical levels for both international and domestic markets:
- International Gold: Expected to find support in the $5,140–$5,220 range, with resistance anticipated near $5,500–$5,650 per ounce.
- International Silver: Likely to hold support between $106.60–$110, facing resistance at $118–$123 per ounce.
- Domestic Gold (MCX): Projected to remain supported above Rs 1,61,600–1,64,000.
- Domestic Silver (MCX): Expected to hold above Rs 3,64,800–3,74,000.
For traders, Jain advises maintaining a buy-on-dips strategy. For gold, he suggests entering long positions above Rs 1,64,400, with upside targets of Rs 1,70,000–1,75,000. For silver, he recommends buying above Rs 3,64,000, targeting a move towards Rs 4,00,000–4,10,000.
