Both gold and silver continued to trade higher during Wednesday’s session, supported by a sustained drop in the US Dollar Index, making the dollar-priced commodities less expensive for holders of other currencies.

After surging past ₹1,662 per 10 grams in the previous session, February gold futures opened higher at ₹1,59,900 per 10 grams and maintained momentum to ₹1,64,900″>hit a fresh record high of ₹1,64,900 (7,201 higher), crossing the 1.64 lakh mark for the first time. The rally also contributed to a 21% gain in January so far.

In an even more stellar rise, silver March futures gained ₹26,821 per kilogram to reach another historic high of ₹3,83,100, ₹4 lakh mark”>edging closer to the ₹4 lakh mark and breaking analysts’ projections earlier than expected.

So far this month, silver has gained a massive 62%, after closing 2025 with a whopping 170% gain.

US dollar near four-year low

The US Dollar Index, which measures the currency against six major peers, rose 0.3% to 96.216, but remained near four-year lows. The currency crashed 1.28% to reach a four-year low in Tuesday’s session after US President Trump said he was not concerned about the currency’s recent decline, adding that it had not fallen too much.

The dollar’s fall was also driven by Trump’s comments that he will soon announce his pick to serve as head of the Fed and his prediction that interest rates would decline once the new chair takes over.

Gold, which does not yield interest, typically performs well when interest rates are low. In addition, growing speculation over a potential joint US-Japan currency intervention to support the yen weighed further on the dollar.

The world’s reserve currency fell over 9% in 2025, marking its steepest annual decline since 2017, with losses further extending into early 2026, falling another 2.07% so far.

US Fed likely to pause rate cuts

The US Federal Reserve will announce its first policy decision of 2026 later in the day, with markets likely anticipating a pause in the rate-cut cycle after lowering rates in each of the last three policy meetings.

The Fed voted to lower the benchmark lending rate by a quarter percentage point at each of these gatherings, bringing rates to a range between 3.50% and 3.75%.

However, investors will closely track cues about the timing of future cuts. The recent rate cuts announced by the US Fed were backed by a cooling labour market. Analysts, however, expect solid GDP growth, relatively low unemployment, and stubborn inflation will lead Fed officials to adopt a wait-and-see approach.

Disclaimer: We advise investors to check with certified experts before making any investment decisions.