Precious metals, particularly silver, witnessed a historic rally in Indian markets on Wednesday, setting new benchmarks as a combination of global cues and domestic currency weakness fueled investor demand.
Record-Breaking Rally for Silver and Gold
On the Multi Commodity Exchange (MCX), silver futures for March 2026 delivery skyrocketed by ₹3,126, marking a significant gain of 1.72 percent. This surge propelled the white metal to an unprecedented peak of ₹1,84,727 per kilogram. Not to be outdone, gold futures also posted strong gains. The February 2026 gold contract on MCX rose by ₹1,007, a 0.78 percent increase, to settle at ₹1,30,766 for every 10 grams.
Domestic and International Factors at Play
Market experts pointed to a dual force driving the rally. Internationally, bullion prices firmed up on the back of widespread anticipation that the US Federal Reserve would implement an interest rate reduction in the coming week. Rahul Kalantri, Vice-President of Commodities at Mehta Equities, noted that recent US economic data indicating mild weakness had increased the probability of a rate cut to nearly 90 percent, bolstering sentiment towards non-yielding assets like gold and silver.
Simultaneously, the domestic front saw the Indian rupee decline against the US dollar, crossing the 90-mark to trade at 90.02 during morning sessions. This depreciation, triggered by dollar demand from banks and foreign fund outflows, made dollar-denominated imports like precious metals more expensive in local terms, further pushing up prices.
Global Markets Echo the Bullish Trend
The bullish momentum was clearly reflected in international markets. On the Comex, gold futures for December delivery advanced by $29.3 to $4,215.9 per ounce, while the February 2026 contract rose by $39.3 to $4,260.1 an ounce. Jigar Trivedi, Senior Research Analyst at Reliance Securities, commented that gold was moving back towards a six-week high, supported by ongoing expectations of further monetary easing from the Fed.
Silver mirrored this strength globally, with December delivery futures on Comex gaining 1.6 percent to reach $58.90 per ounce. The March contract also climbed 1.62 percent to $59.65 per ounce, with both achieving record levels. Kalantri added that market speculation about a potential change in leadership at the US Federal Reserve also contributed a dovish tone to the environment.
As the market looks ahead, investors are keenly awaiting key data releases, including the ADP employment report and the delayed September Personal Consumption Expenditures (PCE) inflation data from the US, for further direction on monetary policy. The concurrent drop in US Treasury yields following initial bond selling pressure has also created a supportive backdrop for precious metals, suggesting the rally may have room to continue.
