Gold and silver prices rose sharply in early trade on Monday, supported by positive global cues and weakness in the US dollar. 

On the Multi Commodity Exchange (MCX), gold February futures were trading 0.72 per cent higher at Rs 1,34,580 per 10 grams during early trade.

Silver March contracts also saw strong buying interest and climbed 1.36 per cent to Rs 1,95,466 per kg.

The precious metals had seen sharp movements in the previous session as well. On Friday, December 12, MCX gold February futures jumped nearly Rs 2,800, or over 2 per cent, to hit a record high of Rs 1,35,263 per 10 grams.

However, some profit booking at higher levels pulled prices down from the peak, and gold ended the session 0.82 per cent higher at Rs 1,33,551 per 10 grams.

Silver also touched a fresh lifetime high in the last session. MCX silver March contracts surged by Rs 2,700, or 1.3 per cent, to an all-time high of Rs 2,01,615 per kg.

Despite the strong rise, heavy profit booking led to a sharp fall by the close, with silver settling 3.33 per cent lower at Rs 1,92,318 per kg.

The gains on Monday morning were driven by weakness in the US dollar and bond yields. The dollar index slipped by around 0.10 per cent, while the benchmark 10-year US Treasury yield edged lower to 4.18 per cent.

A weaker dollar and lower bond yields make non-yielding assets like gold and silver more attractive to investors.

Gold and silver prices have been on a strong upward trend after the US Federal Reserve announced a 25-basis-point interest rate cut on December 10. Expectations of further rate cuts by the US Fed have been a major factor supporting bullion prices this year.

Apart from interest rate expectations, other factors such as strong buying by central banks, healthy inflows into gold and silver exchange-traded funds, rising geopolitical tensions and uncertainty around the global economic outlook due to US tariffs have also boosted prices.