Gold and Silver Prices: After record-breaking gains over the past several weeks, gold and silver are now beginning to lose some of their sheen. These precious metals, which had been steadily rising for nearly two months, are now stabilizing. However, this stagnation is being seen not as a market weakness but as a natural correction. Investors are now in a profit-booking mood, and global economic indicators are reflecting this shift.
The Strength of the Dollar and the Impact of Global Negotiations
According to Rahul Kalantri, Vice President (Commodities) at Mehta Equities Limited, the main reasons for the recent decline are the strengthening of the US dollar and positive trends in trade talks between the US, China, and India. He said, “The rise in the dollar index and peace efforts in the Gaza Strip have alleviated investor concerns, leading to capital outflows from safe-haven investments.”
When the world feels somewhat stable, investors withdraw their money from gold and silver to avoid risk. This is why prices have fallen. However, experts believe that this decline is not permanent.
Relief from inflation and interest rate expectations
Kalanthri believes that softening inflation data and expectations of a possible interest rate cut by the US Federal Reserve have provided renewed support to the bullion market at lower levels. Investors are now buying again at lower prices, injecting renewed energy into the market.
Technically, gold has strong support between ₹1,22,470 and ₹1,21,780, while it may face resistance at ₹1,23,950 and ₹1,24,800. Similarly, for silver, the ₹1,46,250 and ₹1,45,150 levels will act as support, and the ₹1,47,950 and ₹1,48,780 levels will act as resistance.
All eyes on the Fed, ECB, and Bank of Japan
Investors are now focused on announcements from major central banks this week. The US Federal Reserve is expected to cut interest rates by 25 basis points, while the European Central Bank (ECB) and Bank of Japan are unlikely to make any major policy changes.
These decisions will determine market direction, and it will be interesting to see how gold moves in the coming days.
Declining Demand for Safe Havens
According to Darshan Desai, CEO of Aspect Bullion & Refinery, a decline in demand for safe havens is also impacting prices. He said, “Expectations of a US-China trade deal and a strong dollar have weakened gold demand. Investors are now willing to take on some risk, which is putting pressure on the bullion market.”
However, Desai believes that volatility is not over yet. He warned that the coming week could prove to be crucial for the bullion market.
A decisive week for the market
Desai said, “This week, several important events are scheduled, including the meeting between US President Donald Trump and Chinese President Xi Jinping, the Fed’s policy announcement, and earnings reports from major tech companies. All of these events will have a direct impact on gold and silver prices.”
If the Fed signals a lower-than-expected rate cut, gold could see further declines. However, if the central bank adopts a dovish stance or if major geopolitical tensions escalate, gold could regain its luster quickly.
Indications for investors
Currently, the market is in a state of equilibrium. This decline in gold and silver prices may be a short-term setback for investors, but experts still consider bullion a safe bet in the long term. The coming weeks will test investors’ patience amid changing global conditions and central bank policies.