Gold and silver prices: Gold and silver prices jumped sharply on Thursday, December 11, after the US Federal Reserve announced its third straight interest rate cut and indicated that only one more reduction is likely next year. The rate-sensitive metals reacted immediately across global and domestic markets, and investors are now closely tracking how the Fed’s latest policy shift may shape bullion trends in the months ahead.
Gold and silver extended their upward momentum in early trade on Thursday as global markets digested the US Federal Reserve’s latest policy action. MCX gold February futures rose 0.60% to ₹1,30,575 per 10 grams, while MCX silver March contracts surged 2.42% to ₹1,93,300 per kg, after hitting a fresh record high of ₹1,93,452 per kg earlier in the session.
International markets mirrored the trend, with US gold futures for February climbing more than 1% to USD 4,271.30 per ounce, while silver registered yet another record high following the Fed’s announcement.
The Federal Open Market Committee (FOMC) cut benchmark interest rates by 25 basis points (bps) on December 10, bringing the federal funds rate down to a 3.50%–3.75% range — the lowest since 2022. With a total reduction of 75 bps this year, the Fed reinforced its cautious easing cycle, signalling only one more cut in 2026 based on its Summary of Economic Projections.
Lower interest rates tend to support gold because the metal does not offer yield; therefore, the opportunity cost of holding it diminishes when rates fall. Silver benefits from the same dynamic, though its industrial applications give it an added layer of volatility and long-term potential.
What the US Fed’s Move Means for Gold and Silver Prices
As bullion markets absorb both macroeconomic signals and geopolitical tensions, analysts note that the broader sentiment remains firmly tilted toward safe-haven assets. The combination of steady central bank easing, lingering global uncertainties and sustained investment demand has created a supportive environment for precious metals.
With gold and silver already testing historic levels, market participants are now assessing how long this momentum can hold and whether upcoming economic data or policy cues might shift expectations in either direction.
Dr. Renisha Chainani, Head of Research at Augmont, said the metals are reacting not just to the Fed’s policy but also to rising geopolitical risk.
“Despite the Federal Reserve’s dovish estimate for interest rates in 2026, gold and silver prices are trading strongly due to safe haven demand amid geopolitical instability,” she explained. She added that Chair Jerome Powell’s comment that the Fed is “well positioned to wait and see” has further anchored expectations of a patient rate-easing cycle.
Chainani highlighted that the Fed’s projections point to a 3.4% federal funds rate next year and a 3% neutral rate beyond 2028, reinforcing a long-term lower-rate environment that typically favours bullion. Geopolitical triggers such as the US interception of a ship near Venezuela and continued uncertainties around the Russia–Ukraine conflict are also lending strong safe-haven support to precious metals.
Market strategist Ross Maxwell of VT Markets echoed this sentiment, noting that easing monetary policy is likely to keep upward pressure on bullion.
“A softer USD combined with lower interest rates supports gold and silver by reducing the opportunity cost of holding non-yielding assets,” he said. Maxwell expects gold to gradually trend toward USD 4,300 per ounce, while silver could remain in the USD 62–65 per ounce range, though sustainability will depend on broader market conditions.
Chainani, however, warned of key technical levels:
Gold may face selling pressure if it falls below USD 4,200 (~ ₹1,29,000)
Silver could see corrective moves below USD 62 (~ ₹1,92,000)
Sandip Raichura, CEO of Retail Broking and Distribution & Director, PL Capital – Prabhudas Lilladher also believes gold and silver both remain on structural bull runs and especially for gold where he believes investors may see 4800-5000 USD/Oz levels in the near term. Any expected dollar weakness will continue to power silver and gold bulls in the near future,” he added.
Outlook: What Investors Should Watch
The Fed’s measured approach to easing, coupled with heightened geopolitical tensions and a softening US dollar, provides a supportive backdrop for gold and silver. With domestic prices already hitting record levels, volatility is expected, but the medium-term trend remains upward unless rate expectations shift meaningfully.
For now, bullion remains firmly in an uptrend — and the Fed’s policy stance is likely to keep it that way.
Disclaimer: 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.