Gold prices stayed strong on Monday, December 29, just below their all-time highs in the domestic market, as investors still preferred safe-haven assets due to the global uncertainty and the expectation of long-lasting monetary easing.
On the Multi Commodity Exchange (MCX), gold February futures rose 0.16% to Rs. 1,40,099 for 10 grams. Prices reached an intraday high of Rs. 1,40,444. The Silver March futures were at Rs. 2,50,249, with a 4.36% increase.
On the other hand, in the overseas market, the gold spot price was discounted by 0.4% to $4,512.74 per ounce, having achieved a record high of $4,549.71 on Friday.
Mumbai, Kolkata, and Delhi all had prices of Rs. 1,41,210 for 10 grams of 24K gold, while Chennai had a price of Rs. 1,41,810, and Delhi had a price of Rs. 1,41,360.
Mumbai had a price of Rs. 1,29,440 per 10 grams of 22K gold, which was the same price as in Kolkata, Bengaluru, and Hyderabad. Chennai had a higher price of Rs. 1,29,990, while Delhi had a price of Rs. 1,29,590.
Several structural factors are supporting gold prices. The expectation of interest rate cuts by the US Federal Reserve has reduced real yields, and thus, the non-yielding asset, such as gold, has become more appealing.
Moreover, the ongoing de-dollarization measures, political unrest, and uncertainty in worldwide trade have made gold even more important as a hedge against portfolio losses.
Though central banks have cut back their purchases, the demand hasn't shrunk; the necessity is still part of the long-term reserve diversification.
Geopolitical developments, such as talks on resolving the Ukraine war, have caused some fluctuations in the demand for safe havens, but the demand has not substantially decreased.
A decisive break above Rs. 1,40,500 could accelerate gains toward Rs. 1,45,000-Rs. 1,50,000 over the coming months. On the downside, Rs. 1,38,000-Rs. 1,36,400 remains a critical support zone.
Globally, gold is expected to find support near $4,470-$4,425, while resistance is placed around $4,555-$4,570.
Also Read: Top Gold Stocks on the TSX in 2025: Best Performers
The unstoppable rally in the silver prices drove the metal past the Rs. 2,50,000 mark on MCX for the first time on Monday, December 29.
The rally in silver prices coincides with the surge seen in international markets. The silver rate topped the $80 mark earlier this morning for the first time, then retreated amid profit-taking in the white metal, following a massive surge of over 180%.
Silver has gained 181% year-to-date, outpacing gold by a significant margin to emerge as the best-performing asset this year. Silver is now more valuable than the world's most valuable company, NVIDIA, as its market cap surged to $4.65 trillion. NVIDIA is currently valued at $4.63 trillion.