Gold near 7-week high after Fed Reserve rate cuts, soft dollar; India gold at Rs 1.31 lakh

Gold prices clung near a seven-week high on Friday, December 12, riding expectations of additional US Federal Reserve rate cuts in 2025 after a dovish policy pivot. Silver hovered close to Thursday's record, bolstered by surging industrial demand and a fading dollar.

In early trade, 24-carat gold rose Rs 10 per 10 grams to Rs 1,30,760, per GoodReturns data, with 22-carat up Rs 10 to Rs 1,19,860. Silver climbed Rs 100 per kilogram to Rs 2,01,100. Prices varied by city: 10 grams of 24-carat gold hit Rs 1,30,760 in Mumbai and Kolkata, Rs 1,31,470 in Chennai, and Rs 1,30,910 in Delhi. For 22-carat, Mumbai, Kolkata, Bengaluru, and Hyderabad matched Rs 1,19,860 per 10 grams, while Chennai reached Rs 1,20,510 and Delhi Rs 1,20,010. These modest gains reflect steady local demand amid festive season tailwinds and a weakening rupee.

Globally, profit-taking tempered the rally. Spot gold eased 0.2% to $4,277.64 per ounce by 0029 GMT, after Thursday's peak since October 21, while US February futures dipped 0.1% to $4,307.80. Earlier quotes showed spot at $4,270.89 and futures at $4,302 by 0524 GMT—still poised for 1.8% weekly gains. Silver steadied at $63.57 after Thursday's record $64.31, notching a 9.2% weekly surge. The white metal has doubled this year, fueled by solar/electronics demand, low inventories, and US critical minerals status.

A dollar index eyeing its third weekly drop made bullion attractive for overseas buyers. ANZ's Soni Kumari said: “Gold stays positive as markets price in two 2025 rate cuts, overriding the Fed's one-cut dot plot.”

The Fed's third 25-basis-point cut this year passed narrowly. Chair Jerome Powell tied future moves to cooling inflation and labor softening—echoed by last week's four-year-high jobless claims spike, downplayed as temporary.

Non-yielding assets like gold flourish in low-rate eras. Investors eye next week's US non-farm payrolls for policy hints.

Bullish views dominate. Mehta Equities' Rahul Kalantri stated: “Gold and silver remain unstoppable in 2025, backed by global strength and rupee weakness keeping domestic prices high.”

India Bullion & Jewellers Association VP Aksha Kamboj added: “Gold pulls safe-haven flows amid uncertainty, with 2026 upside from slow growth and central bank buys.” On silver: “Industrial booms, dollar slides, and clean energy needs set it to outperform. Small investors: tactical buys, watch volatility.”

Rahul Kalantri, VP–Commodities at Mehta Equities, noted that gold is finding support at $4,230 and $4,185, with resistance levels at $4,310 and $4,345. For silver, he pegged support at $63 and $62.35, and resistance at $64.40 and $64.95.

In the Indian market, Kalantri said gold has support at Rs 1,31,450 and Rs 1,30,550, while resistance is placed at Rs 1,33,150 and Rs 1,34,900. Silver’s support levels stand at Rs 1,96,950 and Rs 1,95,200, with resistance at Rs 2,00,550 and Rs 2,01,700.

City price spreads highlight logistics and local premiums, but macroeconomic tailwinds suggest precious metals' rally endures into 2026.