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The precious metals market experienced significant upward momentum on December 2nd, 2025, with gold prices on the Multi Commodity Exchange (MCX) in India reaching a remarkable high of over Rs 77,000 per 10 grams. This surge represents a substantial increase of Rs 440 per 10 grams, or 0.57%, from the previous day's close. The upward trajectory was maintained throughout the initial trading sessions of 2025, demonstrating strong investor confidence in the commodity. Simultaneously, silver prices also experienced a dramatic rise, exceeding Rs 1,500 per kilogram within a mere two days. This remarkable performance underlines the powerful forces influencing the market and suggests a bullish sentiment among traders.
The international market mirrored this positive trend, with spot gold prices rising by 0.38% to reach $2,634.495 per ounce. This upward movement can be partly attributed to a retreat of the US dollar from recent record highs. The US dollar index, while still elevated at 108.49 (up 0.33% from the previous day), had peaked at 108.58 on Tuesday. The weakening dollar generally makes gold more affordable for buyers holding other currencies, stimulating demand and thereby pushing prices higher. This inverse relationship between the dollar and gold prices is a well-established dynamic in the commodities market. The weakening dollar, therefore, acts as a significant catalyst for gold price appreciation.
Beyond the weakening dollar, geopolitical uncertainties played a substantial role in boosting gold prices. The ongoing uncertainty surrounding Donald Trump's potential tariff policies continues to inject volatility into the global economy, fueling safe-haven demand for gold, a traditionally preferred asset during times of economic uncertainty. Similarly, unresolved geopolitical risks and the ongoing central bank buying of gold, which serves as a strategic reserve asset for many countries, also contribute to this elevated demand. The recent weak China manufacturing data further reinforced the bullish sentiment. The China General Manufacturing PMI plummeted to 50.5 in December 2024, falling short of market expectations of 51.7. This indicator reflects concerns about the health of the Chinese economy, which is a significant consumer of commodities, thus creating further upward pressure on gold prices.
Rahul Kalantri, VP Commodities at Mehta Equities Ltd., expressed a positive outlook for the precious metals market. He anticipates that gold and silver prices will continue their upward trajectory in the coming sessions. This prediction is supported by technical analysis, with Kalantri outlining key support and resistance levels for both gold and silver. For gold, the support levels are identified at $2615-2600, with resistance at $2647-2662 in USD terms and Rs 76,680-76,520 and Rs 77,050-77,210 in INR terms. Similarly, silver's support is positioned at $29.10-28.88 and resistance at $29.40-29.55 in USD, while the INR support and resistance levels are at Rs 87,080-86,500 and Rs 88,230-88,700 respectively. These levels provide valuable insights for traders, helping them gauge potential price movements and make informed investment decisions. The confluence of these factors – macroeconomic uncertainties, currency fluctuations, and technical analysis – provides a comprehensive picture of the dynamic forces influencing the current market.
The current market scenario presents a compelling case for sustained growth in precious metal prices. The combination of a weakening US dollar, geopolitical instability, and weak economic indicators from key global economies all contribute to an environment where investors are increasingly looking towards safe-haven assets like gold and silver. This trend, coupled with the positive forecasts from market experts, suggests that investors should remain attentive to this sector as it potentially offers significant opportunities. However, it's crucial to remember that the commodities market is inherently volatile, and prices can fluctuate significantly based on a variety of factors. Therefore, careful consideration and due diligence are crucial before making any significant investment decisions. Diversification of investment portfolios is also recommended to mitigate potential risks.