The new trading week began with a spectacular surge in the prices of precious metals, as both gold and silver scaled unprecedented peaks in the domestic and international markets. This remarkable rally is fueled by robust demand for safe-haven assets, driven by a cocktail of escalating geopolitical conflicts, trade tensions, and fresh political uncertainty emanating from the United States.
Domestic Markets Witness Unprecedented Rally
On the Multi Commodity Exchange (MCX), the February gold futures contract opened significantly higher at ₹1,39,600 per 10 grams, compared to the previous session's close of ₹1,38,819. The momentum only intensified from there, propelling the yellow metal to smash through the ₹1.41 lakh barrier for the very first time and touch a fresh historic high of ₹1,42,340. This represents a staggering single-day jump of ₹3,521 and contributes to a solid 4.76% gain for the metal so far in January.
The rally was not confined to gold. Silver, often referred to as 'poor man's gold,' staged an even more dramatic performance. After a 7% surge last week, the March delivery silver futures on MCX leaped by ₹15,532 per kilogram to hit a record high of ₹2,68,257. This surge has led to an astonishing 14% increase in just the first nine trading sessions of 2026.
Global Factors Fueling the Frenzy
The international markets mirrored this bullish sentiment. Spot gold prices climbed to a new peak of $4,611 per ounce, marking a 2.2% rise. Meanwhile, spot silver prices strengthened by as much as 7% to reach $85.49 per ounce, adding to a jaw-dropping 19.15% surge in January, following an incredible 148% rally in 2025.
Several interconnected global crises are acting as catalysts for this flight to safety:
- Geopolitical & Trade Tensions: Rising friction in China-Japan trade relations, the US capture of Venezuela's leader, and fresh tariff wars are creating widespread economic uncertainty.
- Middle East Unrest: Intensifying anti-government protests in Iran's capital Tehran, accompanied by internet shutdowns and a government crackdown, have deepened regional tensions.
- Federal Reserve Probe: Reports that US prosecutors have opened a criminal investigation into Federal Reserve Chair Jerome Powell have injected significant political and policy uncertainty into financial markets.
This probe also triggered a fall in the US dollar, which dropped 0.5%—its largest decline in three weeks—making dollar-priced gold and silver cheaper for holders of other currencies and further boosting demand.
Brokerage Outlook and Market Watch
Domestic brokerage firm Motilal Oswal, in its latest analysis, expects the powerful rally in both metals to extend through 2026. The brokerage has set a bullish target of ₹3,20,000 per kilogram for MCX silver, with a risk-support level placed at ₹1,40,000. For gold, the analysts anticipate MCX prices could ascend to ₹1,60,000 per 10 grams.
Market participants are now keenly awaiting the release of the US Consumer Price Index (CPI) data for December. This inflation report is one of the final major economic indicators before the Federal Reserve's monetary policy meeting at the end of January, which will provide crucial guidance on the future path of interest rate cuts.
While both metals experienced some profit-booking in recent sessions, the dips were quickly bought into, demonstrating the underlying strength of the bullish trend that began with a massive rally throughout 2025. The combination of safe-haven demand and a supportive macroeconomic backdrop suggests the record-breaking run for precious metals may have further room to go.
