Editor’s Note
This article reports on a significant surge in gold and silver prices on India’s Multi Commodity Exchange (MCX) on February 13, driven by investor buying and global market cues.
Precious metals prices recorded another significant surge in the Indian futures market on Friday, February 13. A strong recovery was seen in the prices of both gold and silver on the Multi Commodity Exchange (MCX). This rally in the market was driven by investor buying following the heavy decline in the previous trading session and global cues. Gold surged by 30% to reach ₹1,54,837 per 10 grams. Meanwhile, silver prices showed even more intensity, with March futures silver jumping by over ₹6,600 to trade at the level of ₹2,43,081 per kilogram.
On the Multi Commodity Exchange, the bullish trend persisted right from the start of trading on Friday. The April gold contract opened significantly higher than its previous close and quickly touched the level of ₹1,54,837. According to market experts, prices found support from increased demand at lower levels after the decline in the previous session. The rally was even more pronounced in the case of silver. It rose by 4% to reach ₹2,43,081 per kg. In the previous session, silver prices had witnessed a historic decline of nearly 11%, after which a round of short covering took place in the market on Friday. This recovery has re-established precious metals prices at higher levels in the domestic market.
A firm trend was also observed in the prices of gold and silver in the global market. Gold reached $2,040 per ounce. Silver was seen trading at the level of $76 per ounce. Amid the global dollar situation and geopolitical developments, investors have prioritized precious metals as a safe-haven option. During the heavy sell-off in global markets in the previous session, investors had booked profits in gold and silver to cover losses in other assets, but with stability returning to the market, buying has resumed.
Recent economic data from the US has also played a significant role in determining the market’s direction. According to data released by the US Labor Department, 130,000 new jobs were added to non-farm payrolls in January. This figure was in line with market estimates. The unemployment rate has come down to 3%. Following these strong employment figures, new discussions have begun regarding the timeline for interest rate cuts by the US Federal Reserve. According to the data, the market now expects that the Federal Reserve may decide to cut interest rates in July. Due to strength in the labor market, movement has also been seen in the dollar index, which directly impacts global gold prices.
According to market experts, one of the main reasons for Friday’s rally is also ‘short covering’. In the previous session, when silver prices fell sharply by 11%, many traders had placed sell orders. The buying done to close those positions after prices stabilized pushed prices higher. Additionally, investors are also keeping an eye on liquidity conditions in global markets and central bank activities. In the domestic market, physical demand remains continuous due to the wedding season, which is preventing prices from falling to lower levels. A good increase in trading volume was also recorded on MCX on Friday.
Investors’ eyes are now fixed on upcoming US inflation data. If the inflation rate declines, it will become easier for the Federal Reserve to cut interest rates, which could be a positive signal for gold. Currently, despite high interest rates, gold prices remain strong as it is seen as a hedge against inflation. According to market data, continuous gold purchases by central banks amid global economic uncertainties are also providing support to prices. In the coming days, comments from the International Monetary Fund (IMF) and other global financial institutions will also be important in determining market direction.