Following weakness in the US dollar, the Indian rupee and US Treasury yields, precious metals witnessed strong buying across both Indian and global markets on Monday.
On the Multi Commodity Exchange (MCX), gold prices surged sharply, rising ₹1,874 per 10 grams intraday to hit a fresh high of ₹1,35,496 per 10 grams. Silver prices also rallied strongly, jumping ₹6,195 per kg to touch an intraday peak of ₹1,99,046 per kg.
In international markets, COMEX gold prices climbed more than $56 an ounce to an intraday high of $4,384 per ounce, while silver prices gained around $2 an ounce to reach $64.018 per ounce during early trade.
According to bullion market experts, the rally in gold and silver is being driven by a mix of domestic currency weakness and supportive global cues. The Indian rupee slipped to a fresh lifetime low of 90.70 against the US dollar even as the dollar index fell below the 98 mark. The simultaneous weakness in both domestic and global currencies boosted safe-haven demand for precious metals. Falling US Treasury bond yields have further supported the rally, analysts said.
Explaining the key drivers behind the surge, Anuj Gupta, director at Ya Wealth, said gold and silver prices saw strong buying as both the US dollar and the rupee remained under selling pressure throughout the session.
“The US Dollar Index slipped below 98, while the Indian rupee hit a new low of 90.70 against the dollar. This triggered buying in gold and silver in both domestic and overseas markets. In addition, falling US Treasury yields have supported the rally. Yields have dropped from around 4 percent to 3.5 percent in recent sessions, prompting a shift of funds from forex and bond markets into precious metals,” Gupta said.
On the currency outlook, Jateen Trivedi of LKP Securities said the rupee weakened by 28 paise amid delays in the India–US trade deal and continued foreign institutional investor selling.
“Elevated gold and silver prices have also added pressure by widening the import bill. The rupee is likely to trade in the 90.00–91.25 range in the near term,” Trivedi said.
Analysts at BofA noted that the rupee remains heavily dependent on portfolio flows, partly influenced by tariff policies under former US President Donald Trump. They said finalisation of the India–US trade deal could reduce uncertainty for equity investors, while stronger growth momentum next year may support earnings and ease valuation concerns.
On the near-term outlook, Trivedi said gold prices climbed as international spot gold moved towards the $4,350 zone, triggering a strong rally in domestic markets.
“MCX gold reflected global strength with a sharp gain of around ₹1,700, touching a fresh lifetime high near ₹1,35,250. Renewed safe-haven demand and expectations around upcoming US economic data have driven the move. With the Non-Farm Payrolls and Core PCE Price Index due this week, volatility is likely to remain elevated. Gold is now expected to trade in the ₹1,33,000–₹1,36,500 range,” he said.
