Gold futures on the MCX spiked by over Rs 4,100 or 4% on Wednesday, reaching a new all-time high. This surge was driven by investors seeking safe-haven assets amidst concerns of a deepening trade dispute between the US and EU, coupled with a weaker dollar. MCX gold February futures climbed 4.25% to Rs 1,56,970 per 10 grams, while MCX silver March futures also rose by 2.71% to Rs 3,32,451 per kg.
International markets mirrored this trend, with US gold futures on COMEX soaring to $4,849 per troy ounce. Meanwhile, COMEX silver traded within the $92.5–$95.7 range. The rally was spurred by reports indicating that the US plans to impose tariffs on eight European nations starting February 1, potentially escalating duties to 25% by June. In response, European countries are contemplating countermeasures using trade defense mechanisms against economic pressures from foreign governments.
Analysts project a bullish outlook for silver in the medium to long term, foreseeing a surge towards $110–$120 by 2026 due to sustained supply constraints and robust industrial demand. They anticipate immediate upside targets for MCX silver futures at Rs 3,30,000–Rs 3,32,000, with the potential to extend to Rs 3,35,000–Rs 3,50,000 in the coming months. Manoj Kumar Jain of Prithvifinmart Commodity Research noted that global equity markets tumbled amid escalating trade tensions, fueled by the US President’s interest in acquiring Greenland. This turmoil led to panic selling in riskier assets, driving safe-haven purchases for precious metals.
The surge in US 10-year bond yields to four-month highs, triggered by panic selling in Japanese bonds, further bolstered gold and silver prices. Additionally, the depreciation of the rupee provided support to these precious metals. Analysts highlighted robust structural demand from sectors like solar, electric vehicles, AI infrastructure, and electronics, contributing to safe-haven and inflation-hedge investments. The ongoing safe-haven flows, central bank acquisitions, geopolitical uncertainties, and expectations of accommodative monetary policies continue to offer substantial structural support to the precious metals market.
