Gold prices in India extended their winning streak for the fourth session in a row on Tuesday, December 16, scaling fresh peaks. The rally on the Multi Commodity Exchange (MCX) was fueled by persistent safe-haven demand, which gained further momentum after the latest US labor market data strengthened expectations of an interest rate reduction by the Federal Reserve as early as January.
US Jobs Data Fuels Rate Cut Speculation
The US Bureau of Labor Statistics reported that the economy added 64,000 jobs in November, a figure that surpassed consensus estimates of 51,000. This marked a sharp reversal from October's revised decline of 105,000 jobs. Despite the stronger-than-expected headline number, economists highlighted signs of a cooling labor market. The unemployment rate climbed to 4.6%, exceeding forecasts and reaching its highest point since September 2021, up from 4.5% in September.
This mixed report led traders to increase bets on monetary policy easing. Following the data release, futures tied to the federal funds rate briefly priced in a 31% probability of a rate cut at the Fed's January meeting, up from 22% just before the announcement. The odds later settled at around 24%.
Precious Metals Shine on MCX
On the domestic front, the February gold futures contract on MCX, after opening lower at ₹1,33,523 per 10 grams, staged a robust recovery post the US data. It soared to an intraday high of ₹1,35,279, inching close to its record peak of ₹1,35,496 hit earlier. By 8:10 PM IST, MCX gold was trading at ₹1,35,279, up ₹2,684 or 0.80%. In the international spot market, gold was quoted at $4,303 per ounce, gaining 0.53%.
The rally was not confined to gold. Silver prices witnessed an even more spectacular run. The March futures contract for silver jumped by nearly ₹1,485 per kilogram to ₹1,99,386. Last week, silver had breached the ₹2 lakh mark for the first time, achieving a historic high of ₹2,01,615. Remarkably, silver has skyrocketed by 130% so far in 2025, nearly doubling gold's gains during the same period.
Analyst View on Gold and Silver Trajectory
Ponmudi R, CEO of Enrich Money, provided insights into the near-term outlook. "On the domestic front, MCX Gold marked fresh lifetime highs near ₹1,35,496 and formed a classic Doji candle near resistance, indicating profit booking at higher levels," he stated. He emphasized that sustained trade above the breakout zone is crucial to resume momentum, with the next target zone placed at ₹1,36,000–₹1,38,000. The bullish structure is expected to hold as long as prices remain above ₹1,33,000–₹1,32,600.
Regarding silver, Ponmudi noted, "MCX Silver remains in a strong bullish continuation phase after sustaining above ₹1,96,000." He identified upside targets of ₹1,98,000–₹2,03,000, with near-term support at ₹1,91,000 and deeper support around ₹1,86,000, affirming that the broader trend continues to point firmly upward.
Broader market dynamics also supported precious metals. The US dollar index, which measures the greenback against a basket of major currencies, lingered near two-month lows around 98.3. This dollar weakness, coupled with growing investor anxiety over a potential AI bubble in US equity markets, prompted a shift towards traditional safe-haven assets like gold and silver.
The Federal Reserve, in its most recent meeting, had lowered its key interest rate by a quarter percentage point. While signaling a high bar for further cuts, the central bank has now approved three consecutive reductions since September, bringing the benchmark funds rate down to a target range of 3.5%-3.75%.
