Gold and silver prices have maintained their upward momentum this week, reaching their highest levels in almost three weeks. This surge is attributed to diminishing concerns surrounding the US government shutdown and the increasing likelihood of an interest rate reduction by the US Federal Reserve in December.
On Tuesday afternoon, gold futures for December were trading close to Rs 1.25 lakh per 10 grams, while silver surpassed Rs 1.55 lakh per kilogram, indicating robust activity in both global and domestic bullion markets.
INCREASE IN GOLD AND SILVER PRICES
The recent surge in the prices of precious metals is a result of various global and local factors. In the US, the Senate’s move to end the longest-ever government shutdown with a temporary funding agreement has boosted investor confidence. This development has also led to speculation that the Federal Reserve might implement another rate cut to support the economy.
Lower interest rates tend to make non-yielding assets like gold and silver more appealing as investors seek safer options during uncertain economic phases. Additionally, a weaker US dollar and ongoing geopolitical tensions have further fueled the demand for precious metals as safe-haven investments.
Rahul Kalantri, the Vice President of Commodities at Mehta Equities, mentioned that gold has reached its short-term international target of $4,150 (approximately Rs 1,25,000) and is expected to consolidate before moving upward. Similarly, silver has achieved its near-term target of $50.80 (about Rs 1,55,000) and may stabilize before attempting another upward trajectory.
Kalantri highlighted that gold prices have support levels between Rs 1,23,450 and Rs 1,22,880, with resistance levels at Rs 1,24,850 and Rs 1,25,400. For silver, the support levels range around Rs 1,52,850–1,51,900, with resistance at Rs 1,54,940–1,55,880.
In essence, as long as prices remain above the support range, the uptrend is likely to persist. However, a drop below this range could lead to a short-term correction.
TO BUY NOW OR WAIT?
Experts suggest that while gold and silver may experience a temporary pause following their recent surge, the long-term outlook remains positive. JP Morgan, a global investment bank, recently forecasted that gold could surpass $5,000 per ounce next year, driven by ongoing central bank purchases and concerns regarding inflation and slowing economic growth.
For Indian investors, this implies that any dip could present a favorable opportunity to gradually accumulate gold, especially for long-term wealth preservation. Nevertheless, individuals seeking quick profits should exercise caution since both metals are currently approaching short-term resistance levels and may consolidate before resuming their ascent.
In summary, gold and silver continue to serve as robust safe-haven assets. While prices might experience a temporary dip, the overall trend remains upward. Long-term investors may consider purchasing in small increments during any pullback, while traders should carefully monitor support and resistance levels before initiating new positions.
(Disclaimer: The viewpoints, opinions, recommendations, and advice expressed by experts/brokerages in this article are personal and do not necessarily reflect those of the India Today Group. It is recommended to consult with a