Gold & Silver Skyrocket as Rupee Tumbles & US Rate Cut Hopes Ignite! What's Next?

Gold and silver prices experienced a notable upswing on December 3, 2025, primarily driven by a combination of domestic currency weakness and supportive global economic signals. The precious metals opened on a strong note and maintained their gains throughout the trading session on the Multi Commodity Exchange (MCX).

Factors Fueling the Rally

• The Indian Rupee faced a significant depreciation, crossing the critical Rs 90 mark against the US dollar. This slide was attributed to weak trade flows and lingering uncertainty surrounding trade relations with Washington.
• A weaker rupee directly translates to higher costs for imported gold and silver, naturally boosting their prices in the domestic market.
• Concurrently, fresh economic data emerging from the United States has indicated a mild economic slowdown. This has intensified expectations for a more accommodative monetary policy from the US central bank.
• Dovish commentary from Federal Reserve officials has strengthened the market's conviction, with traders assigning an 89% probability to a 25-basis-point interest rate cut at the upcoming Federal Reserve meeting.

Precious Metals Performance on MCX

• Gold commenced the trading day 0.6% higher at Rs 1,30,550 per 10 grams, building on its previous close. By 1:00 PM, it was trading at Rs 1,27,950, marking a substantial gain of 0.48%.
• The yellow metal reached fresh peaks, nearing Rs 1,30,950 and is now on a trajectory towards its lifetime resistance zone around Rs 1,32,294.
• Silver opened with an even stronger surge of 1.21%, priced at Rs 1,83,799 per kg compared to its prior close. By 1:00 PM, it was trading at Rs 1,77,495 per kg, up by 0.51%.
• Silver also touched a new all-time high near Rs 1,84,727. Analysts suggest that a sustained move above Rs 1,84,000 could propel silver prices towards the Rs 1,86,000–Rs 1,88,000 range.

Expert Insights

• Dr. Renisha Chainani, Head of Research at Augmont, emphasized that the sharp fall in the rupee has been a key factor driving domestic gold prices higher.
• Ponmudi R, CEO of Enrich Money, echoed this sentiment, stating that the move in USD/INR towards 90.10 is the primary reason for domestic gold's strength, even if global prices were to stabilize.
• Analysts anticipate that the prevailing mix of supportive domestic currency dynamics and favorable global signals will help precious metal prices remain firm in the near term.

Impact

• The current rise in gold and silver prices makes essential items like jewelry more expensive for Indian consumers. It also increases the cost for industries that rely on these metals for production or investment.
• For investors, these movements highlight precious metals as a potential hedge against currency depreciation and inflation, while also signaling broader economic trends influenced by US monetary policy.
• The dual drivers of a weakening rupee and potential US rate cuts illustrate the interconnectedness of global financial markets and their impact on commodity valuations.
• Impact Rating: 7/10

Difficult Terms Explained

• MCX: Multi Commodity Exchange, a prominent commodity derivatives exchange based in India where trading in gold, silver, and other commodities occurs.
• Basis Point: A unit of measure used for interest rates, equal to one hundredth of a percent (0.01%). For example, a 25-basis-point cut is a 0.25% reduction in interest rates.
• USD/INR: Represents the exchange rate between the US Dollar and the Indian Rupee. A rise in USD/INR signifies that the Rupee has weakened relative to the Dollar.
• Dovish comments: Statements or policy suggestions from central bank officials indicating a preference for maintaining lower interest rates or implementing expansionary monetary policies to stimulate the economy.
• Resistance Zone: In financial charting, a price level where selling pressure is expected to overcome buying pressure, potentially halting or reversing an upward price trend.