Gold prices exhibited volatility on Friday following a brief recovery in the previous session, as traders assessed the implications of the US Federal Reserve’s hawkish signals in contrast to the easing global trade tensions. On the other hand, silver maintained stability, extending its gains driven by short-covering and increased industrial demand signals.
The dollar index surged to a three-month peak subsequent to Fed Chair Jerome Powell’s remarks, reducing expectations of a further rate cut in December. This led to a decline in gold prices, with spot gold trading at approximately $4,004 per ounce during early Asian trading hours.
Despite the retreat, bullion is set for its third consecutive monthly increase, supported by robust central bank purchases, including 220 tonnes in Q3 led by Kazakhstan and Brazil.
Regarding current prices, December gold futures were trading just below Rs 1.21 lakh per 10 grams, while December silver futures hovered slightly above Rs 1.48 lakh per kilogram as of 9:42 am. Rahul Kalantri, Vice President of Commodities at Mehta Equities, highlighted that gold and silver initially weakened in response to Powell’s stance but managed to rebound and close higher on Thursday.
Kalantri outlined the support and resistance levels for gold and silver, indicating that the metals may trade within specific ranges unless significant triggers push them notably higher or lower. In the domestic market, gold is expected to attract buyers at particular price levels while facing selling pressure at others. Silver is anticipated to fluctuate within defined price boundaries.
Jateen Trivedi from LKP Securities noted that geopolitical tensions, including hints from US President Trump about restarting nuclear testing, have kept global investors on edge, supporting sentiment in the bullion market. Trivedi projected gold’s near-term price range and emphasized the ongoing safe-haven demand due to persisting uncertainties.
In contrast, silver’s resilience is attributed to its industrial applications in electronics and renewable energy, making it less susceptible to volatility during uncertain times. Gold awaits a decisive move, while silver remains steady. The market outlook may pivot on upcoming Fed signals in December or any significant geopolitical developments affecting risk sentiment.