Gold prices surged over 0.5% to reach record highs on Wednesday, surpassing $4,500 an ounce. This increase was driven by escalating tensions between the US and Venezuela, along with expectations for more US rate cuts in the upcoming year.
In the commodity market, MCX gold February futures saw a rise of 0.44% to Rs 1,38,485 per 10 grams. Additionally, MCX silver surged by 1.79% to a record high of Rs 2,23,593 per kilogram as of 10:05 am.
The decline of the dollar index by 0.20% during the session resulted in gold becoming more affordable in foreign currencies. Devarsh Vakil, Head of Prime Research at HDFC Securities, noted that spot gold surpassed $4,500 per ounce due to safe-haven demand and expectations of rate cuts. Silver also hit a new all-time high, exceeding $72.
Silver has shown a significant increase of 24% in December and 135% year-over-year, indicating strong supply-demand fundamentals and robust safe-haven flows. Domestic spot gold prices have surged over 76% year-to-date, while international gold prices have risen over 70% in 2025, marking their most substantial annual performance since 1979.
Platinum traded above $2,300 per ounce for the first time in several decades, with palladium also experiencing gains. Recent events, such as the US Coast Guard seizing a Venezuelan oil-carrying super tanker under sanctions and the killing of a Russian army general in a bomb attack, have added to geopolitical tensions, supporting the upward trend of gold and silver prices.
Analysts suggest that gold has support at the Rs 1,35,550-Rs 1,34,710 zone, while silver has support at the Rs 2,11,150-Rs 2,10,280 zone. Factors such as aggressive central bank buying, expectations of US Fed rate cuts, concerns over the impact of US tariffs, geopolitical tensions, and strong inflows into gold and silver ETFs have been key drivers behind the surge in gold and silver prices this year.
