After weeks of glittering gains, gold and silver have finally lost some of their sparkle. The two precious metals, which had been on a tear for nearly two months, are now feeling the heat, influenced as much by geopolitics as by economic factors.
“The pullback was primarily driven by a stronger dollar index and encouraging developments in U.S. trade negotiations with China and India,” said Rahul Kalantri, VP of Commodities at Mehta Equities Ltd. Sentiment was further influenced by progress toward peace in Gaza, leading to profit-taking across the board. This can be simplified to say that when the world feels a little less scary—and the dollar is flexing its muscles—investors typically move away from safe havens like gold and silver.
WHAT NEXT FOR GOLD AND SILVER?
Looking ahead, all eyes are now on an eventful week of central bank action. The U.S. Federal Reserve is anticipated to implement a 25-basis-point rate cut in response to weaker inflation data. Meanwhile, both the European Central Bank and Bank of Japan are expected to keep their current policies intact.
On the technical side, Kalantri notes that gold looks set to find support around Rs 1,22,470 to Rs 1,21,780, while facing resistance near Rs 1,23,950 to Rs 1,24,800. For silver, key levels lie between Rs 1,46,250 to Rs 1,45,150 (for support) and Rs 1,47,950 to Rs 1,48,780 (for resistance).
Meanwhile, Darshan Desai, CEO of Aspect Bullion & Refinery, adds that the fading demand for safe havens is weighing heavily on prices. “Gold prices continue to decline as safe-haven demand weakens amid optimism regarding a potential U.S.–China trade deal and a stronger U.S. dollar,” he observed. Desai cautioned that volatility is far from over.
This week is crucial for the bullion market, particularly with a high-profile meeting between U.S. President Donald Trump and Chinese President Xi Jinping, alongside the Fed’s announcement and several major tech earnings reports. If the Fed suggests fewer rate cuts than anticipated, we may see gold prices fall further. Conversely, dovish comments or any geopolitical flare-ups could quickly bring the sparkle back to these precious metals.
(Disclaimer: The views, opinions, recommendations, and suggestions expressed by experts and brokerages in this article are their own and do not reflect the views of the India Today Group. It is advisable to consult a qualified broker or financial advisor before making any actual investment or trading choices.)
