In a historic moment for the Indian commodities market, silver prices on Thursday shattered the psychological barrier of Rs 4 lakh per kilogram for the first time ever, marking a continuation of an unprecedented rally that has persisted for over two years. Simultaneously, gold, the more traditionally prized metal, surged above the Rs 1.8 lakh per 10 grams mark on the Multi Commodity Exchange (MCX), extending its own rally that has lasted more than a year.
International Markets Also Witness Record Highs
The domestic surge mirrored global trends, with silver prices in the international market rallying above the $120 per ounce mark and gold breaking past the $5,600 per ounce level, both achieving these milestones for the first time in history. However, profit-booking by investors led to a subsequent correction, with silver dropping by 6% and gold by 4% from these record highs.
Detailed Trading Activity on MCX
On MCX, specific contract movements highlighted the day's volatility. Gold futures contracts for February delivery were trading around the Rs 1.75 lakh level in late trades, with the day's high reaching almost Rs 1.81 lakh. As the February contracts neared expiry, April futures emerged as the most traded, hitting a day's high of Rs 1.93 lakh.
For silver, March contracts on MCX were trading at Rs 4.2 lakh, representing the highest price recorded on Thursday, underscoring the metal's robust performance amid the ongoing geopolitical uncertainties.
Expert Insights on the Rally
Rahul Kalantri, Vice President of Commodities at Mehta Equities, attributed the record-breaking rally to increased investor demand for safe-haven assets. He noted that mounting geopolitical and economic uncertainties have driven this shift, with silver strengthening for similar reasons as gold.
Kalantri further explained that the metals rallied despite the US Federal Reserve's decision to maintain interest rates unchanged, which reinforced expectations of prolonged monetary support. "Investors are increasingly moving away from paper currencies and towards tangible assets like precious metals," he said.
Geopolitical Factors at Play
The expert highlighted that geopolitical uncertainty escalated after US President Donald Trump urged Iran to reach a nuclear deal, warning that any future US military response could be far more severe. This tension has added to the global economic unease, fueling the precious metals rally as investors seek stability in volatile times.
