Gold Scales New Record High, Silver Jumps Over 4%, Platinum Skyrockets 10% Today - Here's Why Precious Metals Are Rising

Gold, silver, and platinum prices hit new all-time highs on December 26 amid fresh geopolitical tensions and increasing expectations of an interest rate cut by the US Federal Reserve (US Fed).

On the Multi Commodity Exchange (MCX), February Gold futures rallied as much as 0.97 per cent to its lifetime high at Rs 1,39,433 per 10 grams.

In the international markets, on Comex, February Gold futures surged 1.30 per cent to hit a record high of $4,561.60 per troy ounce. One troy ounce equals 31.10 grams.

MCX March Silver futures jumped more than 4 per cent to hit its record high at Rs 2,33,183 per kg.

On Comex, February Silver futures zoomed 5.31 per cent to a record high at $75.49 per troy ounce.

January Platinum futures on Comex skyrocketed as much as 10 per cent to hit an all-time high of $2,476.20 per troy ounce. March Palladium futures on Comex rose up to 6.65 per cent to $1,927 per troy ounce.

Platinum and Palladium does not trade on MCX.

Gold, Silver, Platinum Prices: Why Precious Metals Are Rising

The following are the reasons behind the rally in Gold, Silver, and Platinum’s prices:

Geopolitical Tensions

The United States is tightening enforcement of what it calls a “quarantine” on Venezuelan oil exports for the next two months, as the US looks to further squeeze revenues flowing to President Nicolás Maduro’s government. The White House has directed US forces to closely monitor and intercept crude shipments.

In a separate development, the US President Donald Trump on the eve of Christmas announced that the Washington carried out air strikes on ISIS militants in northwest Nigeria, following a spate of attacks on local "Christians". Trump said the strikes targeted militants responsible for violence against civilians, including Christians.

Typically, in times of geopolitical unrest, investors turn to safe-haven metals as a hedge against uncertainty and market volatility.

“The rally reflects surging safe-haven demand triggered by escalating geopolitical risks in Venezuela and Nigeria. US pressure on Nicolás Maduro’s regime, including vessel restrictions and fears of potential military action, has amplified year-end gains,” said Kaynat Chainwala, associate vice president of commodity research at Kotak Securities.

US Fed Rate Cut Expectations

The Chicago Mercantile Exchange’s (CME) FedWatch Tool suggests at least two rate cuts by the US Fed next year. Amid a low-interest-rate scenario, non-yielding assets like Gold, Silver and Platinum tend to become more attractive. This is because US Fed rate cuts and expectations of further easing reduces holding costs, explains Chainwala.

Traders are pricing in a 15.50 per cent chance for a 25 basis point (bps) rate cut during US Fed's January 2026 meeting. The probability of a rate cut, however, has reduced from 22.10 per cent on December 23. Majority traders are betting that the US Fed will keep rates unchanged, with a probability of 84.50 per cent.

For the March meeting, the FedWatch Tool suggests a 41.20 per cent chance of a 25 bps rate cut, and 5.80 per cent probability of a cumulative 50 bps rate cut. 53 per cent traders think the US Fed will hold rates.

Weaker US Dollar

Expectations of lower interest rates have also weighed on the US dollar, which typically lifts dollar-denominated metal prices globally.

The US Dollar index, which compares the greenback against world's six major currencies, quoted at 97.73, up slightly by 5 basis points (bps). Over the last one month, the dollar has declined by 260 bps, and over the last one year, it has declined by 965 bps.

Factors Behind Silver’s Rally

Silver prices on MCX have rallied 167.31 per cent year-to-date (YTD). Silver’s rally is largely led by its dual appeal as a safe haven metal and as a crucial component for several industries. Moreover, there is a structural demand-supply gap which is supporting the rally in the white metal’s prices.

Supply Deficit: Prathamesh Mallya, deputy vice president, research, non-agri commodities and currencies at Angel One, said that Silver is primarily produced as a by-product of metals such as copper, lead and zinc, which limits the industry’s ability to quickly increase output even when prices rise. This has kept the metal in a structural deficit for the past seven years, a trend that, he said, supports the current rally.

Industrial Demand: Mallya said industrial demand is coming from the white metal’s increasing use in solar panels, electronics, electric vehicles and other high-tech applications. He added that faster solar adoption, renewable energy expansion and steady growth in global electronics manufacturing have significantly lifted silver demand this year.

October’s Short Squeeze: Adding on to that, according to Chainwala, the white metal’s rally were also driven by the fallout from October’s short squeeze, and acute physical tightness, exacerbated by inventory concentrations in New York amid tariff concerns.”

What Should Investors Do

Gold prices on MCX are up 81.67 per cent so far this year. The rally in the yellow metal’s prices were supported by “robust central bank purchases, steady exchange traded fund (ETF) inflows, and persistent global uncertainty,” explained Chainwala.

Platinum prices on Comex have rallied around 150 per cent YTD. "Platinum prices are being supported by strong industrial demand, and stockists in the US have been covering positions amid sanctions-related concerns, which is helping keep prices elevated," said Jigar Trivedi, senior research analyst at Reliance Securities told Reuters.

Advising investors against trying to time the market, Mallya of Angel One, said predicting short-term price movements is extremely difficult. He said a more sensible strategy is to steadily accumulate exposure on price declines instead of chasing sharp rallies. According to Mallya, investing through digital routes and using systematic investment plan (SIP)-style approaches are the best way to enter in these asset classes.