The precious metals market is experiencing a significant surge, with gold and silver reaching new heights in both domestic and international markets. Gold has now hit a striking ₹88,310 per 10 grams on the MCX, while globally, it soared to $3,004.90 per ounce. This upward trend reflects a 14% increase in gold prices year-to-date, driven by a mix of economic uncertainties and geopolitical dynamics. Silver isn’t lagging behind; it peaked at ₹1,01,999 per kg recently, before settling at ₹1,00,761.
Factors Behind the Precious Metals Rally
Several key elements are propelling the rise in gold and silver prices. Jateen Trivedi, VP Research Analyst at LKP Securities, noted that the recent gains are largely supported by a weaker US dollar and softer-than-expected inflation data. This has heightened expectations for interest rate cuts in both the US and India. The momentum remains strong, though ongoing tariff discussions contribute to market volatility.
Top 5 Reasons for the Surge in Gold and Silver Prices
Sugandha Sachdeva, Founder of SS WealthStreet, highlighted five crucial factors contributing to this bullish trend:
-
Economic Uncertainty from US Tariff Policies: Ambiguous tariff decisions from the US administration have raised global trade fears, enhancing gold’s status as a safe-haven asset.
-
Expectations of US Fed Rate Cuts: Recent inflation data, including a February Core CPI of 0.2%—below the anticipated 0.3%—reinforces beliefs that the Federal Reserve may lower interest rates soon.
-
Decline of the US Dollar: The US dollar index has dropped over 4% this year, making gold a more appealing alternative for investors.
-
Central Banks Increasing Gold Reserves: Global central banks have consistently bought over 1,000 tonnes of gold yearly, particularly following financial sanctions imposed on Russia, showcasing gold’s strategic importance.
- Shift from Equities to Gold: Growing uncertainty in global trade policies has prompted investors to pivot towards gold, seeking its safe-haven benefits amid heightened risks.
Looking Ahead: Gold Price Predictions
As market participants turn their attention to upcoming policy meetings from the Federal Reserve, Bank of England, and Bank of Japan, alongside US retail sales figures, the direction of gold prices will be closely monitored. Sugandha emphasized that geopolitical developments, such as the ongoing tariff disputes and updates on the Russia-Ukraine ceasefire, will significantly impact gold’s appeal.
Key Price Levels to Watch
For those tracking gold prices, Sugandha pointed out that critical resistance levels have been surpassed, with gold now targeting $3,050 per ounce and ₹89,500 per 10 grams. However, caution is advised, as profit-taking may occur around these levels in the near future.
In conclusion, the current landscape for gold and silver is shaped by a combination of economic indicators and geopolitical tensions. The strength of these precious metals continues to draw investor interest as they navigate an increasingly uncertain global market.
