Gold, silver at lifetime highs in India: Factors driving bullion prices

Gold and silver prices surged to all-time highs in the domestic market on Monday (January 12), tracking a sharp rally in overseas bullion amid heightened geopolitical uncertainty and rising risk aversion.

Gold on the Multi Commodity Exchange (MCX) was trading 1.5% higher, or up ₹2,071, at ₹1.40 lakh per 10 grams. Prices touched an all-time high of ₹1.41 lakh per 10 grams earlier in the session.

Silver mirrored the global trend, rising 3.8%, or ₹9,510, to trade at ₹2.62 lakh per kilogram on the MCX. The white metal hit a lifetime high of ₹2.63 lakh per kg during the day.

The domestic rally followed a strong move in international markets,

where spot gold climbed more than 1% to trade near $4,567 per ounce after briefly crossing the $4,600 an ounce mark for the first time. Spot silver also hit all-time high, rising above $83 per ounce.

Market participants attributed the surge to increased demand for safe-haven assets amid escalating geopolitical tensions and growing political pressure on the US Federal Reserve. Weak US employment data has further strengthened expectations of easier monetary policy, supporting bullion prices.

“Gold and silver reaching all-time highs reflects a decisive shift in global risk positioning rather than a short-term anomaly,” said Justin Khoo, Senior Market Analyst – APAC at VT Market.

He noted that gold has broken decisively above the $4,500 an ounce level, while silver continues to trade near multi-year highs despite the US dollar index holding close to 99.

“Elevated geopolitical uncertainty, expanding global defence expenditure and persistent inflation pressures continue to underpin flows into precious metals,” Khoo added.

Rahul Kalantri, Vice President – Commodities at Mehta Equities, said bullion prices were supported by rising geopolitical risks and increasing political pressure on the US Federal Reserve.

“Gold gained over 4% last week, while silver rallied more than 7%, driven largely by heightened global uncertainty,” he said, pointing to unrest in Iran, the Russia–Ukraine conflict and broader geopolitical developments as key drivers of safe-haven demand.

Kalantri cautioned that near-term gains could face resistance if the U.S. dollar remains firm.

Analysts broadly expect bullion prices to remain supported, though some consolidation cannot be ruled out after the sharp rally. R

oss Maxwell, Global Strategy Operations Lead at VT Markets, said a sharp correction in gold would require a significant shift in macro conditions. “Geopolitical uncertainty and structural demand, especially from Asia, look set to keep gold prices elevated. A smaller correction or consolidation appears more likely than a dramatic fall,” he said.

On silver, Maxwell said strong industrial demand, particularly from green technologies, underpins long-term fundamentals, though short-term volatility could remain high due to speculative flows.