Gold and Silver Surge to Three-Month Highs as Weak Dollar Fuels Rally
Precious metals in the national capital experienced a significant rally on Friday, with both gold and silver hitting price levels not seen in over three months. Driven by a softer US dollar and favorable global market momentum, bullion has emerged as a preferred asset for investors seeking refuge from currency and bond market volatility.
Domestic Price Surge
In the local market, the price of 99.9% purity gold climbed by Rs 1,200, reaching Rs 1,63,500 per 10 grams. This marks a notable recovery from Thursday’s close of Rs 1,62,300, bringing prices back to territory last observed on May 19.
Silver displayed even greater momentum, jumping Rs 5,000 to reach Rs 2,50,000 per kilogram. Having added Rs 15,000 in just two sessions, the white metal is trading at levels unseen since May 4, underscoring the strong industrial and investment demand currently impacting the market.
Global Triggers and Market Sentiment
The domestic gains mirror a broader trend in international markets. Spot gold rose by approximately 2%, reaching USD 4,600.91 per ounce, while silver saw a nearly 3% gain to USD 69.87 per ounce.
Gaurav Garg, Head of Research at Lemonn Markets Desk, noted that the current rally is set to cap off a third consecutive week of gains for gold. "Gold extended its rally on Friday’s session… supported by a weaker US dollar and falling longer-term Treasury bond yields," Garg explained.
Analysts highlight that the US Treasury Department’s recent decision to expand its bond-buying program and increase long-term debt buybacks has been a primary catalyst. Praveen Singh, Head of Commodities at Mirae Asset ShareKhan, noted that gold has gained over 4% throughout the week. "The Treasury’s move resulted in a sharp decline in the US dollar and bond yields, giving bullion an additional boost," Singh said.
Geopolitical Tensions and Future Outlook
Market uncertainty has been further amplified by intensifying geopolitical tensions. The US administration’s move to impose what have been described as the "harshest economic sanctions" on Iran has heightened investor anxiety. Tehran has dismissed the measures, fueling ongoing market debate regarding the stability of US debt and global interest payments.
As traders monitor these developments, attention is also shifting toward upcoming US S&P PMI data. Saumil Gandhi, Senior Analyst at HDFC Securities, pointed out that the current climate of extreme volatility in currency and bond markets continues to provide a "safe haven" narrative for precious metals.
While US yields have shown some signs of stabilization as investors question the long-term efficacy of the Treasury’s interventions, bullion prices have largely held their gains, reflecting deep-seated investor caution in the face of persistent macroeconomic uncertainty.
