FPIS HEAVY SELLERS IN YEAR 2025

As year 2025 came to a close, most Indians were celebrating the frenetic rally in gold and silver. That is hardly surprising considering that Indian households have around 25,000 tonnes of gold, and a good share of silver too. However, the FPI numbers were not too encouraging with FPI selling at $18.8 billion in 2025. Clearly, the weak rupee, combined with valuation concerns and the stiff Buffett Ratio made FPIs cautious about India.

In terms of data flows in the week, IIP turned around to above 6% in November, compared to 6 bps contraction in October. The recovery was led by manufacturing, followed by mining. However, it remains to be seen if this bounce in IIP can be sustained. There were concerns on the fiscal deficit front with the fiscal deficit already touching 62.3% of full year target as of November, amid weak tax flows. Over to the key macros.

1. US BOND YIELDS UP SHARPLY THIS WEEK

Data Source: Bloomberg

Key takeaways on US bond yields data:

• The week saw US bond yields rallying sharply from 4.134% to 4.189%
• With unemployment likely to sober to 4.5%, rate cuts could be put off
• However, the $39 Trillion US debt will continue to be an overhang on yields

For the week; US 10-year bond yields scaled a high of 4.197% and a low of 4.104%.

2. US DOLLAR INDEX (DXY) REMAINS UNDER PRESSURE

Data Source: Bloomberg

Key takeaways on US Dollar Index data:

• For the week, the DXY closed just around the 98 levels
• The 4.3% GDP growth has not helped the dollar index too much amid dovishness
• After briefly crossing the 100 level, the DXY is back to lower levels

For the week, US dollar index (DXY) touched a high of 98.50 and a low of 97.92.

3. INDIA BOND YIELDS ALSO HARDEN FOR THE WEEK

Data Source: RBI

Key takeaways on India Bond Yields data:

• India Bond yields edged lower this week from 6.560% to 6.609%
• Record NRI flows of $129 billion during the year may support yields
• Also, the higher-than-expected fiscal deficit is likely to keep yields high

For the week, India Bond Yields touched a high of 6.624% and a low of 6.560%. 

4. RUPEE (USDINR) BACK BEYOND ₹90/$ LEVELS

Data Source: RBI

Key takeaways on USDINR data:

• The Indian rupee weakened from ₹89.796/$ to ₹90.014/$ for the week
• The rupee breached the 90/$ levels after a gap of more than 2 weeks
• NDF selling and hedging demand subdued; action shifts to RBI intervention

For the week, the USDINR touched a high of ₹89.687/$ and low of ₹90.255/$.

5. CRUDE OIL – VENEZUELE ADDS A NEW DIMENSION TO OIL

Data Source: Bloomberg

Key takeaways on Brent Crude Prices:

• Brent crude held $60/bbl this week, but Venezuela could change equations
• Venezuela may take a long time to resume supplies, so oil will be undersupplied for now
• OPEC and US shale supply also likely to keep oil supply excess at 4 million bpd

For the week, Brent Crude touched a high of $62.32/bbl and a low of $60.01/bbl.

6. SPOT GOLD SEES A YEAR-END CORRECTION

Data Source: Bloomberg

Key takeaways on spot gold (XAU) price data:

• Spot gold corrected from $4,532.63/oz to $4,330.50/oz
• The correction was more due to year end lightening of gold positions.
• Brokerage estimates for gold prices are still well above $5,200/oz for this year

For the week, spot gold touched a high of $4,550/oz and low of $4,304/oz. 

7. SPOT SILVER ALSO GIVES UP GAINS THIS WEEK

Data Source: Bloomberg

Key takeaways on spot silver (XAG) prices:

• After the sharp rally last week, silver fell -8.2% this week to $72.66/oz
• India spot silver crossed ₹2,53,000 per KG gaining over 170% over the year
• Gold silver ratio down from 104:1 to 57:1; could trigger more selling in silver

For the week, spot silver touched a high of $83.65/oz and low of $70.06/oz.