Gold Up 1% to ₹1.30 Lakh; Silver Surges on Rate-Cut Hopes

Gold prices moved sharply higher on December 1, 2025, with both global and domestic markets reflecting strong buying interest. The precious metal climbed close to 1% in India, supported by robust demand for safe-haven assets, expectations of a US Federal Reserve rate cut, and increased seasonal buying during the ongoing wedding season. Silver, meanwhile, extended its strong upward streak, hitting fresh highs and outperforming gold in percentage gains.

Gold Near $4,239 Globally as Investors Price in Fed Rate-Cut Chances

Spot gold hovered around $4,239 an ounce for 24-carat purity on December 1. The move was largely driven by investors increasingly factoring in higher chances of a US Federal Reserve rate cut, ahead of Fed Chair Jerome Powell’s much-awaited remarks later in the day. His commentary is expected to set the tone for global markets, with precious metals among the most sensitive to interest-rate expectations.

A possible rate cut makes non-yielding assets like gold more attractive, as lower borrowing costs reduce the opportunity cost of holding gold. This shift in sentiment has kept investor appetite strong.

Domestic Gold Prices Rise 0.84% on MCX to ₹1,30,560

In the Indian commodities market, gold futures on the Multi-Commodity Exchange (MCX) rose 0.84% to ₹1,30,560 per 10 grams during the morning session. This is a notable climb from the previous session’s close of ₹1,29,504.

Domestic prices continue to stay elevated not only due to global cues but also because of seasonal demand, particularly from traditional buyers during the peak wedding season—a time when gold purchases surge nationally.

According to the Indian Bullion & Jewellers Association (IBJA), the price of 10 grams of 999 purity gold stood at ₹1,26,591 on November 28, indicating a steady upward momentum over the past week.

Also Read: India’s Manufacturing Slows to 9-Month Low at 56.6 in November, Still Strongly in Expansion Mode

Why Gold Prices Are Rising: Safe-Haven Demand & Wedding Season Boost

Market sentiment has turned favourable for gold due to a combination of economic uncertainty and strong domestic buying patterns.

Aksha Kamboj, Vice President of IBJA, highlighted the trend by noting that gold has shown “slight strength because of the uncertainty in the global economy and continuing strong domestic demand.” She added that gold prices have been inching upward consistently over recent weeks, reflecting “moderately optimistic” market expectations for further increases.

Such dual support—from both global macroeconomic conditions and India’s cultural buying cycle—has helped gold maintain its bullish momentum heading into December.

Silver Continues to Shine: Prices Hover Above $57 an Ounce

While gold has been in focus, silver has been the standout performer. Considered both a precious and industrial metal, silver continues to benefit from broader economic expectations and growing investor demand.

Spot silver prices hovered just above $57 an ounce on December 1, marking a 1.79% rise from the close recorded on November 28.

On the MCX, December silver futures were trading at ₹1,77,833 per kilogram at 10:41 am, signalling high volatility and strong upward momentum.

A report from Augmont Bullion on November 28 noted that silver has reached a new all-time high, supported by increasing expectations that the US Federal Reserve would further lower interest rates.

Fed Rate-Cut Probability Jumps Sharply

According to the CME FedWatch tool, the probability that the Federal Reserve will lower rates to 350–375 basis points has surged to 87.4%, compared to 71% just a week earlier.

This rapid shift in market expectations has boosted sentiment for precious metals, which traditionally rise when rate-cut hopes strengthen.

Lower interest rates typically weaken the appeal of interest-bearing assets like bonds, making non-yielding metals more attractive alternatives. This dynamic has historically lent support to both gold and silver, and the same trend is now visible again.

How Rate Cuts Impact Gold Prices

As a non-yielding asset, gold benefits when borrowing costs decline. Higher interest rates usually favour bonds and other yield-bearing instruments, which generate returns, whereas gold does not.

A potential rate cut reduces this disadvantage, effectively lowering the “cost” of holding gold and thereby increasing investor appetite. With markets widely expecting such a move, gold has found consistent support in recent trading sessions.

Silver, too, has benefited due to its dual role as an investment metal and industrial commodity.

Gold & Silver Outlook: Momentum Remains Strong

Based on current market trends, both metals appear well-positioned to maintain their upward trajectory in the near term. While traders await Jerome Powell’s remarks for clearer direction, the combination of safe-haven demand, domestic wedding-season purchases, and shifting global monetary expectations continues to keep the precious metals market lively.

For now, gold’s climb to around ₹1,30,560 and silver’s rise to ₹1,77,833 reflect strong investor confidence as 2025 draws to a close.

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