Gold and silver prices rose on Thursday following a brief decline to one-week lows, driven by safe-haven purchases and increasing demand ahead of the peak wedding season. December gold futures on the Multi Commodity Exchange (MCX) held steady around Rs 1.20 lakh per 10 grams during the morning session, showing a slight recovery from previous levels. Meanwhile, silver experienced a more significant uptick after recent weakness, trading at approximately Rs 1.47 lakh per kg.
The rebound in prices coincided with ongoing caution among global investors. Rahul Kalantri, VP Commodities at Mehta Equities, highlighted that geopolitical tensions are fueling interest in bullion. He emphasized that safe-haven buying, amidst growing political uncertainty in the United States, supported the resurgence in gold and silver prices. Kalantri also noted that robust physical demand from Asia, particularly China and Australia, is contributing to price stability.
Despite the positive momentum, a stronger US dollar and mixed economic indicators are posing challenges. The dollar index recently surpassed the 100 mark, reaching a multi-month high, thereby increasing the cost of gold in global markets. Kalantri pointed out that this development has limited further price gains. Moreover, the latest ADP private payrolls report revealed higher-than-expected job additions, potentially reducing the likelihood of immediate rate cuts by the US Federal Reserve.
Looking ahead, Kalantri expects gold prices to remain within a specific range, with global support levels around 3,900 to 3,930 dollars per ounce and resistance levels between 4,025 and 4,055 dollars. In the domestic market, he anticipates support levels around Rs 1,19,280 to Rs 1,19,870 and resistance levels at Rs 1,21,090 to Rs 1,21,600 in the short term. Silver prices are projected to fluctuate between Rs 1,45,750 and Rs 1,49,280.
Jateen Trivedi, VP Commodity and Currency Research at LKP Securities, described the recent market movements as a balancing act between caution and conviction. Trivedi highlighted that gold prices dipped briefly below Rs 1,20,000 due to a strong dollar and uncertainty surrounding potential Fed rate cuts. He expects prices to remain volatile within the range of Rs 1,18,500 to Rs 1,24,000 until there is greater clarity on policy decisions.
With India’s festive and wedding season in full swing, gold demand is expected to receive a boost. Despite record-high prices, jewellers are reporting strong interest from customers. Buyers are opting for lighter jewellery designs and gold coins to manage costs without curtailing purchases. Gold imports have surged to multi-month highs as retailers stock up in preparation for the upcoming season.
The Indian rupee’s depreciation against the US dollar is adding pressure by raising the landed cost of imported gold, as India heavily relies on overseas supplies for its gold requirements. Investment sentiment remains positive, with steady inflows into domestic gold ETFs as investors seek stability amid market volatility. Central banks globally continue to accumulate gold as a hedge against uncertainty, reinforcing the metal’s status as a key reserve asset.
Market analysts suggest that the short-term trajectory of gold and silver prices will hinge on the Federal Reserve’s guidance and any unexpected political developments in major economies. If global uncertainties persist and the dollar weakens, gold could test recent highs. Conversely, if stability returns, prices may consolidate. Despite fluctuations, the allure of gold remains strong, supported by various factors such as wedding season demand, global interest, and central bank activity, indicating continued potential for price appreciation.