Mumbai — Gold and silver prices climbed sharply in early trade on Monday, supported by positive global cues and weakness in the U.S. dollar.
On the Multi Commodity Exchange, gold futures for February delivery were trading 0.72 percent higher at Rs 1,34,580 per 10 grams during early deals. Silver March contracts also saw strong buying interest, rising 1.36 percent to Rs 1,95,466 per kg.
The precious metals had witnessed sharp volatility in the previous session as well. On Friday, MCX gold February futures surged nearly Rs 2,800, or over 2 percent, to touch a record high of Rs 1,35,263 per 10 grams. However, profit booking at elevated levels pulled prices off the peak, with gold ending the session 0.82 percent higher at Rs 1,33,551 per 10 grams.
Silver also hit a fresh lifetime high in the last session. MCX silver March contracts jumped Rs 2,700, or 1.3 percent, to an all-time high of Rs 2,01,615 per kg. Despite the sharp rise, heavy profit booking led to a steep fall by the close, with silver settling 3.33 percent lower at Rs 1,92,318 per kg.
The gains seen on Monday morning were driven by a softer U.S. dollar and easing bond yields. The dollar index slipped around 0.10 percent, while the benchmark 10-year U.S. Treasury yield edged lower to 4.18 percent.
A weaker dollar and lower bond yields tend to boost demand for non-yielding assets such as gold and silver, making them more attractive to investors.
Bullion prices have remained on a strong upward trajectory after the U.S. Federal Reserve announced a 25-basis-point interest rate cut on December 10. Expectations of further rate cuts by the Fed have continued to support precious metals.
In addition to interest rate expectations, factors such as sustained central bank buying, steady inflows into gold and silver exchange-traded funds, rising geopolitical tensions, and uncertainty over the global economic outlook amid U.S. tariff concerns have also contributed to the rally. (Source: IANS)
