New Delhi: Gold and silver prices surged to unprecedented lifetime highs on Friday as a weakening US dollar and mounting expectations of Federal Reserve interest rate cuts fueled a record-breaking rally in global and domestic markets.

On the Multi Commodity Exchange (MCX), the March silver contract skyrocketed by 12,638 rupees, a nearly 4% jump, to reach a new peak of 339,927 rupees per kilogram. This surpassed the previous record of 335,521 rupees set just on Wednesday.

Gold followed suit, marking its fifth consecutive day of gains. The February contract for the yellow metal climbed 2,885 rupees, or 1.84%, to hit a fresh high of 159,226 rupees per 10 grams.

"Gold’s surge to record highs on the MCX reflects a powerful convergence of global risk factors and macroeconomic tailwinds," said Rahul Gupta, Chief Business Officer at Ashika Group.

Gupta noted that safe-haven demand has been reignited by intensifying geopolitical tensions and economic uncertainty. He added that the dollar's retreat has significantly bolstered investor sentiment.

The rally is further supported by traders betting on a dovish shift from the U.S. Federal Reserve. Lower interest rates typically decrease the opportunity cost of holding non-yielding assets like precious metals. The dollar index was down 0.05% Friday, trading at 98.31.

Global Markets: Silver Breaches $99, Gold Eyes $5,000

The momentum was even more pronounced in international trade, where silver crossed the $99-per-ounce threshold for the first time on the Comex. March silver futures rose $3.02, or 3.14%, to a record $99.39 per ounce.

Comex gold for February delivery rose $56.60 to reach $4,970 per ounce, nearing the psychologically significant $5,000 mark.

Renisha Chainani, Head of Research at Augmont, described the week as the strongest for precious metals since March 2020. She attributed the moves to safe-haven flows and recent political developments in Europe.

"Market sentiment was further influenced by President Donald Trump's statement that he had secured permanent U.S. access to Greenland through a NATO deal, though details remain unclear and Denmark has reiterated its sovereignty," Chainani said.

Additional tailwinds include Trump’s decision to halt planned tariffs on European nations and speculation regarding his upcoming appointment as the next Federal Reserve Chair.

"Silver's sharp rally has been amplified by a historic short squeeze, strong retail participation, and China's tightening export controls, adding to supply concerns," Chainani added.

WIth inputs from PTI