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Gold prices remained higher for the fifth straight session on Wednesday, December 17, even as the Indian rupee staged a strong recovery. The February futures contract on MCX opened higher at ₹1,35,79, compared to the previous close of ₹1,34,409, but quickly witnessed a sharp volatility, falling to the day's low of 1,33,373 as a stronger rupee added pressure on domestic prices despite supporting global cues.

Nevertheless, the bullion recovered smartly from the lows to trade at 0.40% higher at 1,34,907 as of 8:40 PM. Meanwhile, the silver prices broke another record high today as the March silver futures contract advanced 4.2% to register a fresh all-time high of ₹2,06,111 per kilo, bringing the year-to-date rally to 135%, nearly double the gain of gold over the same period.

The spot silver advanced 2.8% to an all-time high of $65.63 an ounce, marking the first time the white metal crossed the $65 threshold.

Both precious metals are drawing support from weak US economic data and rising geopolitical tensions, keeping safe haven demand intact. The US labor report, released on Tuesday, showed that the unemployment rate rose sharply to 4.6% in November, the highest level since September 2021.

The data reinforced expectations that the US Federal Reserve could cut interest rates in January, following three consecutive rate reductions since September that brought the benchmark funds rate to a target range of 3.5%–3.75%.

Rising geopolitical tensions are also providing support. US President Donald Trump ordered a blockade of all sanctioned oil tankers entering and leaving Venezuela, escalating pressure on President Nicolas Maduro amid growing military activity in the region.

Meanwhile, markets await crucial US inflation data this week, with Consumer Price Index (CPI) data due on Thursday and Personal Consumption Expenditures (PCE) data on Friday.

The Federal Reserve last week delivered its third and final quarter-point rate cut of the year, and Chair Jerome Powell's comments were viewed as less hawkish than expected. Traders are pricing in two 25-basis-point cuts in 2026.

Non-yielding assets like gold typically perform well in low-interest-rate environments.

Rahul Kalantri, VP, Commodities, Mehta Equities, said, “Gold has support at ₹1,33,850– ₹1,33,110, while resistance lies at ₹1,34,950– ₹1,35,670. Silver has support at ₹1,96,450– ₹1,95,280, with resistance at ₹1,99,810– ₹2,01,270.”

Jateen Trivedi, VP, Research Analyst (Commodity and Currency), LKP Securities, added, “With a data-heavy week ahead in the U.S., including key inflation and labor market indicators, gold is expected to remain highly volatile, with a broad trading range seen between ₹1,31,000 and ₹Rs1,36,000 in the near term.”

(With inputs from Reuters)

Disclaimer: This story is for educational purposes only. The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before making any investment decisions.

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