Metal Stocks Rally on Fed Cut Hopes, Silver Hits Record

Metal stocks surged sharply on December 10 as global cues aligned in favour of the sector, with investors expecting a US Federal Reserve rate cut, alongside a historic rally in silver prices. The combination of easing rate expectations, strengthening industrial demand, and global supply constraints pushed the Nifty Metal index to 10,198.35 at 11:15 am, snapping a two-day losing streak and emerging as the top-gaining sectoral index of the day.

Market experts say the rally is being driven by strong sentiment, although investors are being advised to focus on fundamentals and long-term demand cycles rather than chasing short-term rebounds.

Fed Rate Cut Hopes Boost Metal Stocks

The biggest driver of the rally is the growing expectation that the US Federal Reserve could announce a 25-basis-point rate cut at the conclusion of its FOMC meeting today.

According to the CME FedWatch Tool, traders are now pricing in an 89% probability of a rate cut, a sharp jump from previous months.

Multiple Fed officials have recently signalled the possibility of easing monetary policy:

• Christopher Waller, Fed Governor, said in November that the US job market is weak enough to justify another quarter-point cut this year.

• John Williams, New York Fed President and a permanent FOMC voter, said rates could fall “in the near term” as policy remains “modestly restrictive.” He also noted that there is still room for further adjustment toward a more neutral stance.

Fresh US data showing moderate consumer spending toward the end of Q3 has further encouraged expectations of policy easing.

However, experts still expect disagreements within the Fed, calling this one of the most divided FOMCs in years.

Adding to this, investors are lowering expectations for larger rate cuts in 2026 amid uncertainty about whether Kevin Hassett, the frontrunner to replace Fed Chair Jerome Powell after his term ends in May, will be as dovish as hoped by President Trump.

Also Read: India–US Trade Deal Is ‘Only a Matter of Time,’ Says Commerce Secretary

Why Rate Cuts Matter to Indian Metal Stocks?

A Fed rate cut reduces global borrowing costs, making it easier and cheaper for foreign investors to deploy capital in emerging markets.

This typically results in:

• Higher foreign inflows

• Stronger demand for cyclical sectors

• Rising prices for commodities and metals

The sentiment flowed directly into domestic metal counters, leading to broad-based gains across steel, aluminium, zinc, copper and base-metal producers.

Silver Prices Hit Lifetime Highs Worldwide

While metal stocks soared, silver prices delivered the biggest shock of the day.

In India:

• Silver futures (March expiry) surged 1.5% to a record ₹1,90,799/kg.

• Silver futures (May expiry) hit a fresh lifetime high of ₹1,93,299/kg.

Globally:

• Spot silver crossed $60/oz for the first time.

• Prices hovered around $61/oz, marking an astonishing 32% jump in just 24 hours.

Experts attributed the spike to:

• Rising industrial demand

• Tight global supply

• A wave of fresh investment buying

Aksha Kamboj, Vice President of IBJA, said silver has “outperformed gold” as investors increasingly prefer it due to supply constraints and strong industrial usage.

What Should Investors Do Now?

Analysts warn that while metal stocks are rising, the strategy should not revolve around chasing quick spikes.

Naren Agarwal, CEO of Wealth1, said investors should focus on:

• Balance sheet strength

• Capacity utilisation

• Long-term demand visibility

He emphasised that this is crucial across steel, aluminium and base metals supply cycles.

Aman Gupta, Director at RPS Group, added that Indian metal companies are enjoying a “strong breath of fresh air” due to global price strength and shortages abroad. He noted that cyclical sectors may offer opportunities if investors time their entries carefully and remain selective.

Shravan Shetty, MD at Primus Partners, said niche metal stocks have outperformed large steel and aluminium players this year. He also pointed out that while rupee depreciation aided performance, tariff impacts have weighed on margins.

Top Metal Gainers of the Day

The rally lifted almost all metal stocks, with some standing out:

Biggest Gainer

• Hindustan Zinc jumped around 5%, supported by soaring silver prices and rate cut expectations.

Stocks Up Nearly 2%

• Vedanta

• Jindal Stainless Steel

• Hindalco Industries

Stocks Up Around 1%

• Tata Steel

• Jindal Steel & Power

• Hindustan Copper

Other Gainers

• Welspun Corp

• APL Apollo Tubes

• Adani Enterprises

• NMDC
  These stocks were trading with marginal but positive gains.

Losers

Despite the sectoral surge, a few counters slipped:

• JSW Steel

• SAIL

• NALCO
  All three were trading in the red with marginal losses.

Market Outlook

The combination of:

• Expected US rate cuts

• Surging global silver demand

• Strong industrial usage

• Supportive base-metal pricing

has created one of the strongest intraday rallies for metal stocks in recent weeks.

However, analysts caution that long-term positioning should depend on deeper fundamentals rather than short-term volatility. With investors awaiting the Federal Reserve’s policy announcement, further movements in metal stocks will likely track global macro signals.

Click here to explore
Gift Nifty
FII DII Data
IPO