Gold and silver prices are set to rise further! Here's why

This year has been a stellar year for the commodities market. Gold and silver, in particular, have delivered strong returns to investors. 

Experts believe that gold and silver prices could continue their record-breaking rally as investors focus on global inflation data and key macroeconomic indicators that determine central bank policy paths.

The main focus will be on macroeconomic data, including inflation figures from India, the US, Europe, and the UK, as well as provisional manufacturing and services PMI data in major economies. 

He added that traders in the US will also keep an eye on non-farm payroll claims, housing data, and consumer sentiment, which will determine the direction of bullion prices.

"Gold and silver will remain in positive territory as traders focus on key data from China, followed by inflation data from India, the US and the UK, as well as provisional manufacturing PMI data from all sectors," Pranav Meir, Vice President, EBG Commodity & Currency Research, JM Financial Services, told PTI.

Gold remains positive

Pranav Meer said that gold prices maintained positive momentum following the Fed's rate cut and liquidity boosting measures. However, the central bank maintained a cautious stance, indicating it would wait for more data before easing further. This stance led to heavy selling in US Treasuries and pressure on the dollar index, which supported gold prices.

He further said that geopolitical tensions between the US and Venezuela, as well as concerns about the yen weakening ahead of an expected 25 basis points rate cut by the Bank of Japan on December 18, have strengthened gold's safe-haven appeal. 

On MCX, the yellow metal hit an all-time high of Rs 1,35,263 for 10 grams on Friday, supported by a weak dollar and strong investor buying. 

Echoing similar sentiments, Pankaj Singh, Founder and Principal Researcher, SmartWealth AI, a smallcase manager, said the fall in the rupee's value against the US dollar has boosted domestic gold returns.

Why did gold rise?

Pankaj Singh said that gold prices continued their upward trend last week as the rupee fell to a record low against the US dollar amid trade frictions, tariff uncertainty, and persistent capital outflows. 

Currency weakness is strengthening gold's role as a foreign exchange hedge for Indian investors. He said the medium-term outlook for gold remains positive, as currency trends are influencing domestic prices. In the international market, Comex gold futures rose by USD 85.3, or 2.01 percent, last week.

In the overseas market, silver futures rose USD 2.95, or 5 percent, last week and crossed the USD 65 per ounce mark for the first time on Friday. 

Silver prices hit another all-time high on Friday and surpassed the ₹200,000 mark in the domestic market, said Pranav Meer. However, sharp selling during the US trading session dragged the metal down by more than 4 percent.

Investing in ETFs

According to Riya Singh of Emkay Global Financial Services, investor participation in precious metals remains strong. She said ETFs in India are seeing record participation, while speculative interest in China's silver market has increased, and Shanghai trading volumes have returned to levels seen during previous supply crises. 

Singh said silver is being supported by falling yields, ample liquidity, strong central-bank buying, continued ETF inflows, and robust industrial demand from sectors such as solar energy and electronics.

He said that while volatility may persist until there is a significant shift in US monetary expectations, precious metals are poised to maintain an upward trend until early 2026. 

Meir expects silver to remain bullish in the near term. He said silver prices are looking positive and could move further up to the ₹225,000-₹240,000 per kilogram level.