Gold rates surge 2% on MCX; silver prices skyrocket more than 5% on global uncertainties; what should investors do?

The rates of gold and silver saw massive gains and hit their record highs in intraday trade on the MCX on Monday, January 12, as investors rushed to safe-haven assets on rising geopolitical uncertainties, the dollar's fall, and increased prospects of US Fed rate cuts this year.

MCX gold February futures jumped by ₹2,60500, or almost 2%, to hit a record high of ₹1,41,469 per 10 grams, while MCX silver March futures surged by ₹12,666, or 5% to scale its fresh peak of ₹2,65,391 per kg.

International gold prices breached the $4,600-per-troy-ounce mark for the first time on Monday, driven by geopolitical and economic uncertainties, as well as the dollar's decline against its peers.

The dollar index fell by about 0.20% in response to reports that U.S. prosecutors have opened a criminal investigation into Federal Reserve Chair Jerome Powell.

As Reuters reported, Powell said the Trump administration had threatened him with a criminal indictment.

According to a Reuters report, the Trump administration has threatened to indict Powell over his testimony last summer to Congress about a Fed building project.

Powell has termed the action a pretext to gain more influence over the central bank and monetary policy, according to Reuters.

On the geopolitical front, investors are keenly observing the situation in Latin America and the Middle East.

The recent US-Venezuela conflict, Trump's aggression over Greenland, protests in Iran, and renewed concerns over US tariffs have heightened geopolitical risks, driving a surge in demand for precious metals.

Apart from geopolitical factors, expectations of a rate cut by the US Federal Reserve this year are also supporting gold prices. For silver, industrial demand remains a key driver.

Friday's data showed the US employment growth slowed more than expected in December.

Markets are pricing in at least two Fed rate cuts this year. The U.S. inflation data this week will offer more cues about the Fed's monetary policy path.

Experts expect gold and silver prices to rise further, but there could be intermittent profit booking as they are at record levels.

"Geopolitical uncertainty and structural demand, especially from Asia, look like they will keep gold prices higher. A smaller correction or consolidation is much more likely. Industrial demand, especially from green technologies, underpins long-term fundamentals in silver’s high pricing," said Ross Maxwell, Global Strategy Operations Lead, VT Markets.

Is it the right time to buy gold? What should investors do?

Experts anticipate that gold prices will continue to rise. However, traders and investors should wait for some dips to initiate new long positions.

According to Jigar Trivedi, Senior Research Analyst at Reliance Securities, investors should wait for a little correction (3-5%) to buy gold for the long term.

For intraday traders, he said the MCX gold February futures may remain elevated amid a rise in geopolitical tensions between the US and Iran, and ₹1,42,000 per 10 grams is the resistance level for intraday trading today.

Rahul Kalantri, VP of commodities at Mehta Equities, said gold has support at $4,465 and $4,415 while resistance is at $4,555 and $4,580. Silver has support at $78.10 and $76.75, while resistance is at $81.85 and $82.70.

In INR, Kalantri said gold has support at ₹1,34,550 and ₹1,32,310 while resistance is at ₹1,41,350 and ₹1,43,670. Silver has support at ₹2,48,810 and ₹2,44,170, while resistance is at ₹2,55,810 and ₹2,59,470.

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Disclaimer: This story is for educational purposes only. The views and recommendations expressed are those of individual analysts or broking firms, not Mint. We advise investors to consult with certified experts before making any investment decisions, as market conditions can change rapidly and circumstances may vary.