Gold and Silver Prices Surge Amid Renewed Safe-Haven Demand
Gold and silver prices have experienced significant fluctuations in recent days, with a notable rise on Wednesday following a dip on Tuesday. This volatility is largely driven by renewed safe-haven demand, as investors seek refuge in precious metals amidst escalating global uncertainties. The resurgence in prices comes after gold reached a three-week high earlier in the week, only to see a correction as traders locked in profits.
Geopolitical Factors Fueling Precious Metals Rally
Several geopolitical events are contributing to the increased appeal of gold and silver. US President Donald Trump's threats of additional tariffs, following a Supreme Court ruling that deemed some of his previous tariff measures illegal, have heightened trade policy uncertainties. Additionally, ongoing tensions between the United States and Iran, with nuclear negotiations scheduled in Geneva, are adding to the global risk environment. The uncertainty surrounding the impact of artificial intelligence and a downturn in technology stocks are further pressuring equities, prompting investors to flock to gold as a protective asset.
Market Updates and Technical Analysis
As of the latest updates, spot gold gained 0.5% to $5,174.76 per ounce during Asian trading hours, while US gold futures for April delivery rose 0.3% to $5,192.20. Reuters technical analyst Wang Tao suggests that gold prices could find support near $5,140 per ounce, with potential resistance at $5,244. A sustained move above $5,205 might push prices into the range of $5,221 to $5,244.
In other precious metals, spot silver increased by 1% to $88.23 per ounce, after reaching a more than two-week high earlier. Spot platinum advanced 2.1% to $2,212.72 per ounce, and palladium rose 1.4% to $1,793.68.
ETF Inflows and Central Bank Activity
Gold ETF holdings have reversed multi-year outflows, with India emerging as a key growth market. According to Motilal Oswal Financial Services (MOFSL), assets under management in Indian gold ETFs surged to ₹1,279 billion ($14.2 billion), increasing India's share of global ETF holdings from 1.9% to 2.5%. Concurrently, COMEX and LBMA inventories have declined by 20–40% from their 2024 peaks, temporarily disrupting the supply-demand balance.
Central banks have also played a crucial role in supporting gold prices, with net purchases of around 1,000 tons for the fourth consecutive year—the most sustained official-sector accumulation since the collapse of the Bretton Woods system.
Federal Reserve and Economic Indicators
Two officials from the US Federal Reserve have indicated little current inclination to adjust interest rates, though financial markets are pricing in three potential rate cuts of 25 basis points each this year. Kyle Rodda, a senior market analyst at Capital.com, noted that factors such as US fiscal trade policies and foreign policy uncertainties could drive further upside for gold. The reopening of Chinese markets and heightened policy uncertainty in the United States continue to bolster demand for safe-haven assets like gold and silver.
Outlook for Gold and Silver Prices
The near-term direction of gold and silver prices remains closely tied to geopolitical developments and economic policies. With safe-haven demand back in focus, investors are closely monitoring US tariff actions, Iran negotiations, and global equity market trends. As uncertainties persist, precious metals are likely to maintain their appeal as a hedge against volatility, with potential for further gains if current drivers continue.
