Gold and Silver Rally on Weak US Dollar
Gold prices rebounded sharply on Thursday, rising Rs 3,000 to reach Rs 1.47 lakh per 10 grams, as a weakening US dollar revived demand for bullion. The precious metal recovered from recent losses, supported by increased buying interest from investors and jewellers.
Silver continued its upward trajectory for the third consecutive session, climbing Rs 5,000 to Rs 2,40,000 per kilogram (inclusive of all taxes). The white metal has been gaining momentum amid positive market sentiment and industrial demand.
Factors Driving the Rally
According to market analysts, the primary catalyst for the surge in gold and silver prices was the weakness in the US dollar index. A softer dollar makes dollar-denominated commodities like gold cheaper for holders of other currencies, thereby boosting demand.
Additionally, geopolitical uncertainties and expectations of a slower pace of interest rate hikes by the US Federal Reserve have supported safe-haven buying. Traders also cited short-covering and fresh positions ahead of key economic data releases.
Market Impact and Outlook
The rebound in gold prices comes after a period of consolidation, with the metal finding support at lower levels. The rise in silver prices reflects its dual role as both a precious metal and an industrial commodity, with demand from solar panel and electronics sectors adding to the positive momentum.
Analysts predict that if the US dollar remains under pressure, gold could test higher resistance levels in the near term. However, they caution that any unexpected strength in the dollar or hawkish comments from central banks could trigger profit-booking.
Domestic markets are also tracking global cues, with the rupee-dollar exchange rate influencing local prices. Investors are advised to monitor international developments and central bank policies for further direction.
