Why are gold and silver prices suddenly surging? Traders await US inflation clues

Mumbai: Gold and silver futures moved higher on Friday, supported by firm global cues as traders waited for crucial US inflation data expected to influence the Federal Reserve’s upcoming policy decision.

On the Multi Commodity Exchange (MCX), gold futures for February rose by Rs 751, or 0.58 per cent, to Rs 1,30,829 per 10 grams, compared with Thursday’s close of Rs 1,30,078. Silver futures for the March 2026 contract increased by Rs 4,288, or 2.41 per cent, to Rs 1,82,426 per kilogram, up from Rs 1,78,138 in the previous session.

A weakening US dollar also lent support to bullion prices, with the dollar index trading 0.13 per cent lower at 98.87. Globally, Comex gold for February delivery was up USD 17.45, or 0.41 per cent, at USD 4,260.45 per ounce, while silver for March 2026 traded 2.25 per cent higher at USD 58.78 per ounce.

Kotak Securities noted that gold was trading above USD 4,205 as markets awaited the release of the US Personal Consumption Expenditures (PCE) inflation data, a key indicator for the Fed’s December policy direction. Rahul Kalantri of Mehta Equities said gold strengthened while silver experienced mild profit-booking on Thursday after positive US jobless claims.

He added that weaker labour indicators, including a sharper-than-expected fall in ADP payrolls and persistent layoffs, have increased market expectations of a rate cut at the Federal Open Market Committee (FOMC) meeting, with odds approaching 87 per cent.

Gold futures in India extended gains on Friday, tracking firm global trends ahead of the release of US PCE inflation data. On the MCX, gold for February delivery rose to Rs 1,30,829 per 10 grams, a gain of 0.58 per cent. Silver futures for March 2026 strengthened by 2.41 per cent to Rs 1,82,426 per kilogram.

The uptick coincided with a softer US dollar, which typically boosts bullion demand. The dollar index fell to 98.87 during early trade. Internationally, Comex gold and silver also climbed, with traders positioning themselves ahead of US inflation numbers that could influence the Federal Reserve’s rate outlook.

Analysts said investor sentiment has been shaped by mixed US economic data. While jobless claims came in positive, weak private payroll numbers and rising layoffs point to easing labour-market strength. This has increased expectations that the Fed may consider a rate cut at its upcoming policy meeting.

Market watchers note that bullion prices remain sensitive to macroeconomic indicators, particularly inflation and labour-market performance, as these guide the Fed’s decisions on interest rates. A dovish outlook could further support gold and silver in the near term.
(With PTI inputs)