Gold prices in India continued their record-breaking spree for the third consecutive session on Monday, December 15, scaling another historic peak on the Multi Commodity Exchange (MCX). The rally is fueled by investor bets on looser monetary policy from the United States Federal Reserve in the coming year and persistent geopolitical tensions, which are undermining the US dollar and boosting the appeal of the yellow metal as a safe-haven asset.
Historic Highs for Gold and Silver
The February gold futures contract on MCX opened stronger at ₹1,34,204 per 10 grams, compared to the previous close of ₹1,33,622. The momentum continued, pushing prices to touch a fresh all-time high of ₹1,35,496 per 10 grams. By 8:10 PM IST, the contract was trading at ₹1,34,689, marking a gain of ₹1,081 or 0.80%.
This surge has propelled the year-to-date rally for gold to an impressive 75.5%, setting the stage for its most significant annual gain since 1979. In the international spot market, gold prices also edged higher, rising 0.55% to $4,323 per ounce.
The rally was not confined to gold alone. Silver prices extended their upward trajectory, with March futures contracts surging by nearly ₹6,000 per kilogram to reach ₹1,99,500. Last week, silver had crossed the ₹2 lakh mark for the first time, hitting a record peak of ₹2,01,615. So far in 2025, silver has outperformed gold, with prices skyrocketing by 130%.
Drivers of the Rally: Weak Dollar and Global Tensions
The primary catalysts behind the precious metals' ascent are twofold. First, ongoing geopolitical uncertainties, including peace talks in Eastern Europe and tensions in the Middle East and Latin America, have reinforced the traditional role of gold as a safe-haven investment during times of global instability.
Second, the US dollar, which measures the currency against a basket of six major peers, hovered near a two-month low. A weaker dollar makes dollar-priced gold more affordable for buyers using other currencies, thereby stimulating demand. Concurrently, benchmark 10-year US Treasury yields edged lower. Since gold is a non-yielding asset, it becomes more attractive in a lower interest rate environment.
Investors are now keenly awaiting a series of key US economic data releases this week, which are expected to provide further clues on the Federal Reserve's potential rate-cut path. The delayed November nonfarm payroll figures and October retail sales data are scheduled for Tuesday, followed by the November consumer price index on Thursday.
This data assumes greater significance after the US Federal Reserve, in a divided vote last week, delivered a 25-basis-point rate cut, signaling that further monetary easing would depend on evolving labor market and inflation conditions.
Analysts' Outlook and Trading Strategy
Market experts attribute the sustained rally to renewed safe-haven demand and anticipation surrounding the upcoming US macroeconomic indicators. Jateen Trivedi, VP Research Analyst, Commodity and Currency at LKP Securities, noted that focus has shifted firmly to US cues like Non-Farm Payrolls and the Core PCE Price Index.
"With Non-Farm Payrolls and the Core PCE Price Index scheduled this week, focus has firmly shifted to US macro cues, which are expected to keep volatility elevated. Gold prices are now seen trading in a higher range between ₹1,33,000 and ₹1,36,500," Trivedi added.
Brokerage firm Axis Securities pointed out that the metal has been forming a pattern of higher highs and higher lows over recent months, confirming a strong positive trend. On technical charts, gold is comfortably positioned above key moving averages, indicating robust upward momentum. The firm maintains a positive bias for gold as long as it holds above the ₹1,25,000 support level.
Axis Securities recommends a specific trading strategy: buying MCX Gold around ₹1,31,600, with a stop loss set below ₹1,28,000 and price targets of ₹1,35,000 and ₹1,37,000.
Disclaimer: This article is for informational purposes only. The views and recommendations above are those of individual analysts or broking firms and do not represent the views of Mint. Investors are strongly advised to consult with certified experts before making any investment decisions.
