Precious metals markets witnessed a historic rally on Monday, with both gold and silver prices shattering previous records to set new all-time highs in international and domestic trading. The surge was reflected sharply in markets across India, including Hyderabad, leaving investors and industry watchers astounded.
Unprecedented Price Rally in Bullion
On the Multi Commodity Exchange (MCX), the February gold futures contract made a staggering leap of over Rs 1,700 to touch a never-before-seen peak of Rs 1,36,646 per 10 grams. This mirrored the momentum in global markets, where spot gold on COMEX pierced the $4,400 per ounce barrier for the first time, eventually climbing to a high of $4,435 per ounce in evening trade.
The rally in silver was even more dramatic. MCX March silver futures sprinted to Rs 2,14,583 per kilogram, following its international counterpart which topped $69 per ounce. In the physical markets of Hyderabad, the impact was immediate. Sources reported that 24K gold was quoted at a fresh record of Rs 1,36,150 per 10 gm, marking a sharp rise of Rs 1,970. Silver, not to be outdone, jumped by Rs 5,000 to reach Rs 2,31,000 per kg in the city.
Expert Analysis: What's Fueling the Frenzy?
Market analysts point to a confluence of powerful factors driving this explosive rally. Saumil Gandhi, Senior Commodity Analyst at HDFC Securities, highlighted the sheer scale of the yearly gains, noting, "The most active silver contract in Comex has jumped over 120% so far this year, while the most active gold future surged nearly 58%."
Surendra Mehta, National Secretary of the Indian Bullion and Jewellers Association (IBJA), attributed the gold spike directly to monetary policy. "Gold prices are skyrocketing as the US Fed keeps pumping liquidity," he stated. Mehta further explained that aggressive gold buying by central banks, amid concerns that higher Japanese interest rates could destabilize the US economy, is adding pressure. On silver, he noted a unique trend: "Silver is rising as paper silver short sellers are converting to physical gold."
Geopolitical instability is another significant catalyst. Avinash Gupta, Vice-Chairman of the All-India Gem & Jewellery Domestic Council, said, "Geopolitical tremors are adding fuel. A costlier dollar, a sliding yen, and conflicts from the Middle East to Venezuela are pushing big investors out of Treasuries and into precious metals." Gupta also emphasized the role of surging industrial demand for silver, particularly from the green technology sector. He made a bold prediction: "Add the EV revolution—with Samsung's new solid-state batteries reportedly using huge amounts of silver—and you have the recipe for $100 silver by 2026."
A Word of Caution for Investors
Despite the euphoria, the steep rally is making experts uneasy, prompting warnings for retail investors. Satish Dondapati, Fund Manager – ETF at Kotak Mahindra AMC, cautioned that after a spectacular run, silver may enter a phase of consolidation. He advised a measured approach: "A staggered investment approach such as SIP or STP may be more suitable, as it helps average purchase costs, manage volatility, and build long-term exposure to gold in a disciplined manner."
Echoing this sentiment, Saumil Gandhi flagged technical indicators, stating, "Gold and silver are deep in overbought territory on higher time frames, which is a caution sign." He pegged immediate support for spot gold at $4,375 and resistance at $4,480.
The record-setting Monday in the bullion markets underscores a global shift towards safe-haven assets amid economic uncertainty and geopolitical strife. While the long-term outlook for precious metals remains bolstered by strong fundamentals, the current price levels call for strategic and cautious investment from individuals looking to enter the market.
