Gold, silver rally to extend record run as traders eye inflation data

Gold and silver prices are poised to maintain their record-setting rally in the coming week as investors focus on global inflation data and key macroeconomic indicators that shape central bank policy paths, analysts said.

The spotlight will be on macroeconomic numbers, including inflation readings from India, the US, Europe, and the UK, as well as provisional manufacturing and services PMI data across major economies.

In the US, traders will also track non-farm payroll/ weekly jobless claims, housing data and consumer sentiments, which will also shape the direction of bullion prices, they added.

"Gold and silver's momentum will remain positive as (traders) focus on key data from China, followed by inflation numbers from India, the US, and the UK, along with provisional manufacturing/ services PMI data from across regions," Pranav Mer, Vice President, EBG - Commodity & Currency Research, JM Financial Services, said.

On the Multi Commodity Exchange (MCX), gold futures appreciated Rs 3,160, or 2.42 per cent over the past week, settling at record levels.

"Gold prices continued their positive momentum after Fed rate cuts, and liquidity boost measures. However, the central bank maintained a cautious tone, signalling it would wait for more data before additional easing. This stance triggered a sharp sell-off in US treasuries and pressured the dollar index, which in turn helped gold prices," Mer said.

He added that geopolitical tensions between the US and Venezuela, along with concerns over unwinding of yen, carry trades ahead of the Bank of Japan's expected 25 basis points rate cut hike on December 18, have strengthened gold's safe-haven allure.

On the MCX, the yellow metal touched a lifetime high of Rs 1,35,263 per 10 grams on Friday, supported by a weak dollar and robust investor buying.

Echoing similar sentiments, Pankaj Singh, smallcase manager, Founder and Principal Researcher, SmartWealth AI, said, the depreciation of the rupee against the US dollar has amplified domestic gold returns.

"Gold prices extended their upward momentum last week, as the rupee fell to record lows against the US dollar amid trade frictions, tariff uncertainty, and persistent capital outflows. The currency's weakness continues to reinforce gold's role as an foreign exchange hedge for Indian investors," Singh said.

He added that the medium-term outlook for gold remains constructive, as currency trends continue to influence domestic prices.

In the international market, Comex gold futures rose USD 85.3, or 2.01 per cent, last week.

"Gold extended its gains as the US Treasury and the dollar softened after the Federal Reserve's third consecutive 25 basis point rate cut, signalling potential further easing in 2026 despite internal dissent," Riya Singh -- Research Analyst, Commodities and Currency, Emkay Global Financial Services, said.

Silver also joined the rally, marking its third straight week of gains. On the MCX, the white metal futures surged Rs 9,443, or 5.15 per cent, during the past week, climbing to an all-time high of Rs 2,01,615 per kilogram on Friday before retreating slightly on profit booking.

In the overseas market, silver futures rose USD 2.95, or 5 per cent, over the last week, breaching the USD 65 per ounce-mark for the first time on Friday.

"Silver prices surged to yet another all-time high on Friday, breaching past Rs 2,00,000-level in the domestic market. However, the metal pared gains in a sharp sell-off of more than 4 per cent during the US trading session," said Pranav Mer.

According to Riya Singh of Emkay Global Financial Services, investor participation in precious metals remains strong.

"India continues to see record ETF participation, while China's silver market shows elevated speculative interest, with Shanghai trading volumes returning to levels seen during past supply squeezes," she said.

Singh added that silver remains supported by falling yields, ample liquidity, strong central-bank buying, persistent ETF inflows, and firm industrial demand from sectors like solar energy and electronics.

"The volatility may persist, unless US monetary expectations shift meaningfully, precious metals are poised to retain an upward bias into early 2026," she said.

Mer expects silver to remain bullish in the near term. "Silver prices look positive and may move further up towards Rs 2,25,000-2,40,000 per kilogram level," he added.