Spot gold traded 0.4% higher at $4,188.93 per ounce as of 0200 GMT, taking weekly gains to about 4.8% an ounce. US gold futures for December delivery held steady at $4,191.90 an ounce.
In India, gold prices stood at ₹12,866 per gram (24K), ₹11,791 per gram (22K) and ₹9,648 per gram (18K). Silver prices were at ₹173 per gram and ₹1.73 lakh per kg.
The dollar index headed for a second straight weekly decline, making dollar-priced bullion more attractive for global buyers.
“Gold has done well mainly because of a weakening dollar and speculative flows expecting the Fed to lower interest rates,” said Brian Lan of GoldSilver Central.
Why gold is rising, and what’s keeping it in check
Expectations around US monetary policy continued to shift through the week. After two rate cuts earlier this year, Fed officials signalled discomfort with further easing given persistent inflation worries and a relatively stable labour market.
Markets are now pricing in around a 51% probability of a December quarter-point cut—down from 64% a day earlier, according to CME FedWatch. Lower interest rates typically support non-yielding assets like gold.
The reopening of the US government after a record 43-day shutdown, which had temporarily disrupted economic data releases, also added to short-term uncertainty.
Silver outperforms as global physical tightness intensifies
Silver outpaced gold this week. Spot prices rose 1.2% to $52.95 an ounce and were set for their best weekly performance since September 2024, up nearly 9.6%.
Analysts flagged an increasingly tight global physical market as a key driver.
According to Harshal Dasani of INVasset PMS, silver is entering one of its “tightest physical markets in decades,” driven by aggressive buying in Asia and declining inventories across major vaults.
India’s physical demand has rebounded sharply, with annual imports expected to return toward the 5,500–6,000-ton range. In China, private-sector offtake is rising, Shanghai inventories are falling, and industrial users continue to lock in supplies. Visible inventories in London and COMEX have also thinned.
This squeeze comes on top of structural supply deficits. For several years, silver demand—led by solar panels, EVs, electronics, and investment—has outpaced mine output and recycling. The U.S. recently added silver to its critical minerals list, signalling strategic concerns over supply.
Dasani said this shift is pushing physical buying to dominate price formation: “Every dip is being absorbed by real buyers… silver is transitioning from a cyclical commodity to a strategically scarce asset.”
Rahul Kalantri of Mehta Equities noted that both metals remain supported by the softer dollar and lingering macro uncertainty.
–With Reuters inputs