Precious metals commenced trading on a solid note on Friday, with gold February futures on the MCX opening higher by Rs 996 or 0.73% at Rs 1,36,800 per 10 grams. Internationally, bullion commenced trading robustly, with gold spearheading the movement on Friday by recovering from a recent two-week low. The recent increase comes after an exceptional 2025 for the asset class, during which gold reached new all-time highs before experiencing a temporary decline.
As of 0019, spot gold exhibited an increase of 0.8%, now valued at $4,346.69 per ounce, as it recovers from earlier declines experienced this week. The yellow metal reached an all-time high of $4,549.71 on December 26. Meanwhile, US gold futures for February delivery increased by 0.5% to $4,360.60 per ounce. The favorable conditions supporting this increase seem to remain in place. The US Federal Reserve’s anticipated trio of rate cuts in 2025 has already enhanced market sentiment. With expectations for at least two additional cuts this year, investors are looking forward to a liquidity boost that may bolster commodity prices universally.
The weakening US dollar contributes to the prevailing bullish sentiment. “The dollar’s downward trajectory may continue, driven by de dollarisation trends, mounting US debt, and the Fed’s lower interest rate stance,” stated Manoj Kumar Jain. He noted that the 10-year US bond yields could decline below 4.0%, potentially further stimulating the commodity rally. The US Dollar Index was last observed around the 98.17 level, reflecting a decline of 0.15%.
While macroeconomic drivers continue to provide support, Jain highlighted significant global dynamics that could alter the momentum. Moderating oil prices, subdued inflation, and easing geopolitical tensions may sustain support for commodity prices throughout the first half of 2026. However, any escalation in the Middle East or a decline in US-Venezuela relations could introduce volatility into the equation. Jain anticipates that a majority of commodities, both precious and non-precious, are poised to continue their upward trajectory in the first half of the year, potentially transitioning into a phase of profit-taking or consolidation in the latter half. Specifically for gold and silver, he anticipates that the favorable momentum observed in recent years will continue. “High volatility will be a theme, driven by central bank buying, interest rate cuts, portfolio diversification and strong investment demand,” he stated.