Is Gold Rising While Silver Falls After Record High?
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Synopsis
Gold prices are on the rise while silver experiences a downturn. Traders are reacting to recent record highs in the market, influenced by shifts in US monetary policy. This article explores the current trends in precious metals and what they mean for investors amid economic uncertainty.
Key Takeaways
- Gold prices increased slightly while silver prices declined.
- MCX gold futures are trading at Rs 1,32,599 for February.
- Silver futures fell to Rs 1,97,951 for March.
- The US Federal Reserve's rate cut has influenced precious metals.
- Investors are waiting for key US economic data next week.
Mumbai, Dec 11 (NationPress) On Friday morning, gold prices witnessed a slight increase, while silver prices declined as traders took profits following a new peak on the MCX. During the early trading session, MCX gold futures for February recorded a 0.10 percent rise, reaching Rs 1,32,599 for every 10 grams.
According to analysts, "MCX Gold has achieved lifetime highs, trading near Rs 1,32,776 within a tightening ascending wedge, with strong support at Rs 1,31,400."
They further noted, "The next resistance zone opens the momentum leg towards Rs 1,34,000 and beyond." In contrast, MCX silver futures for March dipped by 0.50 percent to Rs 1,97,951 per kg.
In the previous session, silver had reached an all-time high of Rs 1,98,814 per kg, ending the day with a notable gain of 5.33 percent at Rs 1,98,799.
Gold February futures also experienced healthy demand, closing at Rs 1,32,469 per 10 grams after a 2 percent increase.
The rally in both metals followed the US Federal Reserve's decision to lower its benchmark interest rate by 25 basis points, with hints of a possible further cut next year.
Meanwhile, the dollar index fell to 98.30, making gold more affordable for international buyers, thereby increasing demand.
Simultaneously, the Indian rupee remains at its historic low against the US dollar, which is bolstering gold prices in the domestic market.
Investors are awaiting crucial US economic data, including inflation figures and the non-farm payrolls report set to be released next week. These indicators are expected to influence perceptions regarding the Fed’s subsequent policy directions.
A market observer remarked, "The US Federal Reserve’s choice to reduce key interest rates by 25 bps to 3.50 percent-3.75 percent amid ongoing inflation has strengthened bullish sentiment toward precious metals."
Lower interest rates decrease the opportunity cost of holding non-yielding assets like gold and silver, thus attracting new investment.
Analysts commented, "As bullion remains at record highs, this policy shift provides additional momentum to the rally, as investors gravitate towards safe-haven assets in the face of economic uncertainty and inflationary pressures."
Point of View
It is vital to provide a balanced perspective on the evolving dynamics of precious metals. The fluctuations in gold and silver prices reflect broader economic trends and investor sentiment, highlighting the need for informed decision-making in uncertain times. We encourage readers to stay updated on market developments and consider the implications for their financial strategies.
NationPress
13/12/2025
Frequently Asked Questions
What factors are influencing gold and silver prices?
Gold and silver prices are significantly influenced by interest rates, inflation data, and currency fluctuations, particularly the strength of the US dollar.
Why did silver prices decline after hitting a record high?
Silver prices fell as traders took profits following a record high, which is a common practice in trading to secure gains.
How do interest rate cuts affect gold and silver?
Interest rate cuts decrease the opportunity cost of holding non-yielding assets like gold and silver, making them more attractive to investors.
What is the significance of the Indian rupee's value in gold pricing?
A weaker Indian rupee against the US dollar supports higher gold prices in the domestic market, making it more expensive for buyers.
When should investors expect the next US economic data release?
Key US economic data, including inflation numbers and the non-farm payrolls report, are expected to be released next week, which will influence market expectations.
