Domestic gold rates surged to unprecedented levels on Monday, with February futures hitting a fresh lifetime high of ₹1,45,500 per 10 grams on the MCX. The rally was driven by global price momentum following US President Donald Trump's fresh tariff threats against European nations over his planned Greenland acquisition.

Market Performance and Global Impact

The precious metal demonstrated strong bullish momentum across markets on Monday:

The surge came after Trump announced plans to impose rising tariffs from February 1 on goods imported from several European nations. The targeted countries include EU members Denmark, Sweden, France, Germany, Netherlands, and Finland, along with Britain and Norway. These measures are intended to pressure these nations until the US is allowed to purchase Greenland.

Geopolitical Tensions Escalate

Trump's Saturday announcement marked a significant escalation in trade tensions, with major EU states describing the move as blackmail. The threat comes after a previously negotiated trade deal and has reignited market concerns about global trade stability.

European Union ambassadors responded on Sunday by reaching broad agreement to intensify efforts to dissuade Trump from implementing the tariffs. According to Reuters reports citing EU diplomats, the bloc is also preparing a package of retaliatory measures should the duties proceed as planned.

Technical Analysis and Market Outlook

Jateen Trivedi, Vice President - Research at LKP Securities, noted that gold begins the week on a firm note with the broader trend remaining firmly bullish. However, he emphasized that elevated price levels suggest buying on intraday or positional dips remains the preferred strategy rather than chasing upside momentum.

Key Technical Levels

Technical Indicators Analysis

The technical picture remains constructive across multiple indicators:

• RSI (14): Currently at 69, reflecting strong momentum while staying below extreme overbought levels
• Bollinger Bands: Price trading near upper band, confirming trend strength with moderately expanded bands
• Moving Averages: EMA 8 providing dynamic support around ₹1,42,500-₹1,43,000, with EMA 21 near ₹1,39,000-₹1,40,000
• MACD: Remains in positive territory with histogram above zero, indicating intact bullish momentum

Currency Impact and Trading Strategy

Trivedi highlighted that persistent rupee volatility is keeping MCX gold relatively more volatile compared to COMEX. Any renewed weakness in the Indian rupee is likely to cushion downside risks and support domestic gold prices even during global consolidation phases.

For trading strategy, experts suggest a buy-on-dip approach with the following parameters:

The bullish structure is expected to remain intact as long as prices hold above the ₹1,40,000 level on a closing basis, with the positive slope of key moving averages reinforcing the continuation of the uptrend.

Silver futures on Multi Commodity Exchange (MCX) surged over 5% on Monday to breach the significant ₹3 lakh per kilogram barrier, as geopolitical tensions and safe-haven demand propelled precious metals to fresh record highs. The rally was triggered by US President Donald Trump's bid to acquire Greenland and threats of punitive tariffs on European nations, creating a flight to precious metals that has driven silver ETFs up 30% year-to-date in 2026.

Record-Breaking Performance Across Precious Metals

The white metal's ascent to $93 per ounce represents what Aamir Makda, Commodity & Currency Analyst at Choice Broking, describes as "a level once considered unthinkable." Gold futures also participated in the rally, climbing 1.75% to ₹1,45,000 per 10 grams and marking fresh all-time highs for both metals.

Geopolitical Catalysts Drive Market Sentiment

"Gold and silver are no longer just commodities, they are geopolitics in metal form," said Amit Jain, Co-Founder of Ashika Global Family Office Services. "When major powers fight over resources like Greenland, markets instinctively price in risk, and precious metals become the default refuge. This rally reflects not speculation, but a deeper loss of confidence in global stability."

Trump's proposed 10% tariff hike on European countries, potentially escalating to 25% by June, has intensified what Makda characterizes as a "perfect storm" of industrial scarcity and geopolitical chaos. Over the past year, silver has skyrocketed more than 170%, while gold has gained over 70%.

Technical Analysis Signals Caution

Despite the bullish momentum, technical indicators are flashing warning signs. Makda noted: "We have observed a RSI bearish divergence on the daily charts, which is a classic 'Red flag' warning. It suggests that while the price is still climbing and hitting new peaks, the internal momentum driving those gains is actually weakening."

Falling open interest levels in March contracts point to "long unwinding," prompting Makda to advise that "traders who already have long positions should look for profit-booking at current levels."

Fundamental Drivers Support Long-Term Outlook

Silver's transformation from a monetary metal to a crucial industrial commodity continues to underpin demand. Key drivers include:

• Surging solar photovoltaic expansion
• Electric vehicle production requiring significantly more silver than traditional cars
• AI data centers reliant on silver-based components
• Global supply deficit projected at 230 million ounces in 2026
• China's strict export licensing and stagnant mining output

"The rally is mainly attributed to strong global geopolitical uncertainty, supply-side concerns, a weakening US dollar, and robust industrial as well as investment demand," explained Satish Dondapati, Fund Manager at Kotak Mutual Fund. "Silver, being an industrial metal as well, has an added advantage in the current macroeconomic scenario."

Investment Considerations and Market Outlook

The gold-to-silver ratio has collapsed to its historical average of 50:1, indicating silver's dramatic outperformance relative to gold. However, domestic investors should note that HDFC Securities has cautioned about potential import duty reductions on precious metals in the upcoming Union Budget, which could create "short-term headwinds" for domestic prices despite the bullish long-term outlook.

Vishal Kapoor, CEO of Bandhan AMC, emphasized the importance of investment vehicle selection: "Gold and silver can play a meaningful role in portfolio diversification, but the way investors access these assets matters. Physical metal often brings uncertainties around purity, making charges, storage, and resale, while ETFs require demat accounts that many investors still do not use."