NEW DELHI, Jan 28, 2026, 05:52 IST
- India’s MCX silver surged to a record following a steep one-day leap; gold futures climbed to a new peak as well.
- Analysts tied the rally to safe-haven demand driven by tariff threats and geopolitical tension, while all eyes remained on the Fed meeting.
- Jewellers said physical sales took a hit as customers traded in old jewellery and moved toward digital gold and ETFs.
Silver futures on India’s Multi Commodity Exchange (MCX) shot up sharply on Tuesday, with the March contract gaining roughly 30,000 rupees per kg to hit a record 364,821. Gold futures also climbed, reaching a new high near 159,820 rupees per 10 grams, marking another significant move in bullion prices. 1
The pace of the rally is just as crucial as its level. In India, gold and silver aren’t merely traded commodities; they serve as raw materials for jewellery and a popular form of household savings. Sudden price swings therefore impact retailers and investors simultaneously.
Jewellers have stopped buying fresh bullion amid the rally, leaning on customers swapping old jewellery to meet demand, The Economic Times reported. “Bullion sales have dropped by 70%,” said Harshad Ajmera, managing director of JJ Gold House. Aksha Kamboj, vice-president of the India Bullion & Jewellers Association, added that demand is moving towards digital gold and exchange-traded funds (ETFs), which trade like shares. 2
The surge followed a global rush into precious metals. Spot gold jumped over 3%, hitting a record $5,181.84 an ounce on Tuesday. Spot silver climbed 7.7% to $111.84, after reaching a record $117.69 just a day earlier, Reuters reported. “Rallies normally end because the drivers dissipate — and that’s just not the case,” said Michael Widmer, commodities strategist at Bank of America, as markets absorbed tariff threats and zeroed in on the U.S. Federal Reserve’s policy meeting. Citi raised its short-term silver forecast to $150 an ounce, even as platinum and palladium retreated from recent peaks. 3
In Delhi’s physical market, 99.9% gold surged 4.6% to hit 166,000 rupees per 10 grams, while silver soared 12.3% to 370,000 rupees per kg, both marking record highs including taxes, Navbharat Times reported. Soumil Gandhi, senior commodity analyst at HDFC Securities, attributed the gains to safe-haven buying amid trade and geopolitical tensions. At the same time, Lemon Markets Desk analyst Gaurav Garg warned of potential near-term profit-taking following the sharp jump. 4
Some analysts argue this move goes beyond simple risk-off trading. Pranav Kumar, founder and CEO of PlusCash, pointed to a mix of factors driving the sharp rally: strong industrial demand in renewables and electronics, tight supply, safe-haven buying, and a softer rupee. 5
Financial Express reported that the most-active MCX March silver contract ended up 8% at 361,500 rupees per kg, after hitting a record high of 364,821. The outlet highlighted supply constraints as demand outpaces supply for the fifth consecutive year. Analysts also warned that silver’s recent outperformance versus gold could signal a late-cycle rally, cautioning about the risk of a sharp pullback after the steep gains. 6
The surge comes at a time when jewellers usually count on festivals and weddings to boost sales. PC Jeweller revealed a 28% jump in quarterly profit on Tuesday, according to Reuters, which highlighted steady demand despite elevated prices. The report also mentioned that peer Tribhovandas Bhimji Zaveri saw a strong profit rise earlier this month. 7
The very price spike attracting investors can also stifle physical demand. Should the dollar stabilize, geopolitical tensions ease, or the Fed hint at prolonged higher rates, bullion could quickly retreat — and a sharper decline would reveal how much recent buying stems from investment rather than actual end-use.
India’s bullion market is gearing up for more volatile sessions ahead. Traders keep a close eye on the Fed and upcoming tariff news, while jewellers hope for a breather that might coax retail buyers to return—without snapping up new stock at peak prices.
