Silver prices surged sharply in early trade on Monday, with MCX silver futures jumping more than 3% to hit fresh record highs, tracking a strong global rally amid rising geopolitical tensions and growing expectations of interest rate cuts in the United States.
On the Multi Commodity Exchange (MCX), silver futures were trading around Rs 2,61,100 per kg, up over Rs 8,300, as investors rushed into precious metals as a hedge against global uncertainty.
The rally in silver mirrors the sharp gains seen in gold prices globally. Spot silver jumped over 4% overnight to hit an all-time high near $84 per ounce, supported by escalating geopolitical risks, particularly unrest in Iran, and renewed concerns around global political instability. Reports of large-scale casualties in Iran and strong rhetoric involving potential US military action have heightened safe-haven demand across precious metals.
Another key driver behind silver’s surge is the increasing expectation of US Federal Reserve rate cuts in 2026. Recent US economic data showed slower-than-expected employment growth in December, with job losses in sectors such as construction, retail and manufacturing. While the unemployment rate eased slightly, markets interpreted the data as a sign of a cooling labour market, strengthening bets that the Fed could cut interest rates at least twice this year.
Lower interest rates tend to benefit non-yielding assets like silver and gold, as the opportunity cost of holding them declines. Adding to this, comments from Federal Reserve Chair Jerome Powell about political pressure on the central bank have reinforced market concerns around policy uncertainty, further boosting demand for hard assets.
Silver has also gained from its dual role as both a safe-haven and an industrial metal. Expectations of sustained demand from green energy, electronics and electrification themes continue to support its medium-term outlook, especially at a time when investors are looking to diversify away from riskier assets.
With gold scaling new peaks globally and silver outperforming on a percentage basis, the precious metals complex remains firmly in focus, driven by a mix of geopolitical stress, macroeconomic uncertainty and expectations of easier monetary policy ahead.