Big bullion days: Why are gold and silver reaching record highs every day?
In India, the timing for the gold and silver rally could not have been more interesting, as the surge comes just ahead of Dhanteras, when buying gold is considered auspicious.
Dhanteras is just a day away, and gold and silver seem to be in a race to reach record highs everyday. Both gold and silver prices are soaring to historic highs in global and domestic markets.
Gold touched a new peak above $4,300 an ounce on Friday, marking its best weekly performance in five years, while silver surged past $54 an ounce, breaking its all-time record from 1980.
In India, gold futures opened at Rs 1,31,429 per 10 grams on the Multi Commodity Exchange (MCX) and continued to trade above Rs 1,31,600 during the session.
Silver too is trading at a record high of Rs 1.68 lakh per kilogram. The rally has been supported by global uncertainty, including weakness in US regional banks, trade frictions, and expectations of further interest rate cuts.
GLOBAL UNCERTAINTY DRIVING INVESTOR INTEREST
The sharp rise in bullion prices reflects growing investor appetite for safe-haven assets amid global tensions. Market analysts say fears around the US economy, rising trade disputes between the US and China, and signs of stress in the financial system have pushed investors towards gold and silver.
“This is the first time ever we are seeing gold breach the $4,300 level,” a commodity trader noted, adding that the rally has been ongoing since August. “Silver’s surge this week is equally historic, crossing $54 an ounce and setting new records last seen over four decades ago.”
The consistent rise across gold, silver, platinum, and palladium is being seen as part of a broader move toward safer investments amid growing concerns about credit quality and slowing growth in major economies.
WHY IS SILVER OUTPERFORMING GOLD?
Yash Sedani, Assistant Vice President, Investment Strategy at 1 Finance, said that the stronger rally in silver compared to gold is due to broader industrial demand.
“The main reason behind the rally is stronger demand compared to supply for both metals. While gold is primarily a store of value with limited industrial use, silver has broader industrial applications, particularly in electronics and renewable energy, leading to higher overall demand,” Sedani explained.
He added that global factors are the key drivers. “Geopolitical tensions, trade disputes, and ongoing military conflicts have increased uncertainty, prompting central banks and investors to turn towards gold and silver as safe-haven assets.”
IMPACT OF INTEREST RATES AND CENTRAL BANK BUYING
Interest rate movements and central bank actions have also played a major role in driving prices higher.
“While inflation trends remain broadly in line with historical patterns, the key differentiators today are strong net buying by central banks and interest rate cuts, which are leading to lower real yields,” Sedani said. “This environment makes non-yielding assets like bullion more attractive. Combined with sustained retail and industrial demand, these factors have supported higher prices for both gold and silver.”
He added that retail interest in silver has risen because of its industrial applications. “Silver’s role in electronics and green energy is now expanding rapidly, further reinforcing its investment case,” he noted.
INVESTOR SENTIMENT AND MARKET OUTLOOK
Speaking about whether the rally will sustain, Sedani said predicting short-term movements is difficult.
“Price movements will depend on global and domestic developments that are humanly impossible to predict. Investors should focus on maintaining an optimal asset allocation and long-term wealth creation rather than attempting to forecast short-term price movements,” he said.
He also cautioned investors not to chase recent highs. “Past one-year performance is not a guarantee of future returns. Gold and silver have historically seen extended periods of flat or negative performance. Investors should avoid chasing recent winners and instead adopt a balanced allocation approach, recognising that every asset class moves in cycles.”
DOMESTIC FACTORS AND FESTIVE BOOST
Indian markets are witnessing strong physical demand due to Dhanteras and Diwali, traditionally seen as auspicious occasions to buy gold and silver. However, experts warn that prices may correct after the festive period.
“First of all, happy Diwali. This is a very auspicious day, and we have already seen gold prices cross Rs 1,30,000 in the domestic market, while silver has doubled from last Diwali,” said Ajay Kedia, MD & Director at Kedia Advisory.
He added that the current surge has been driven by multiple factors. “Geopolitical tensions, interest rates, and recession fears have all come together to fuel this rally. For now, we expect buying to continue during the festive season,” he said.
However, Kedia cautioned that investors should remain alert. “There is a slight risk-on tone now. Unless geopolitical concerns or interest rates ease significantly, the rally can continue. We might see gold testing $4,500 and silver moving towards $72. But a cautious approach is needed, as the market could see corrections post-Diwali,” he said.
SILVER STEALS THE SHOW
Kedia also believes silver remains a more attractive option for retail investors. “Silver is often called the poor man’s gold. Those who missed the gold rally are now turning to silver,” he said. “The metal has strong demand both from investors and industries, particularly in the electric vehicle and clean energy sectors. While supply remains tight, investment demand is rising.”
He added, “Unless this squeeze clears out, silver could move towards $58–$60 immediately and even test $75 in the long term. But as an investor, this may not be the right time to enter, as prices have already doubled over the past year.”
Experts agree that while gold and silver are likely to stay in focus in the near term, investors should avoid short-term speculation. The festive and wedding seasons may support demand for a few more weeks, but prices could stabilise once global economic conditions settle.
For now, the combination of inflation concerns, rate cuts, and global uncertainties continues to fuel the rally in precious metals. Whether gold continues its record-breaking run or silver extends its lead will depend largely on how global trade tensions, interest rates, and investor sentiment evolve in the coming months.
(Disclaimer: The views, opinions, recommendations, and suggestions expressed by experts/brokerages in this article are their own and do not reflect the views of the India Today Group. It is advisable to consult a qualified broker or financial advisor before making any actual investment or trading choices.)