Gold and silver prices are likely to encounter resistance at higher levels, according to Vedika Narvekar, Research Analyst - Commodities & Currencies at Anand Rathi Shares and Stock Brokers. The precious metals have seen a recent pullback after a strong rally earlier in 2026, with macroeconomic factors outweighing safe-haven demand despite ongoing tensions around the Strait of Hormuz.
Gold Price Trends
Gold prices continued their decline last week. International spot gold fell approximately 2% to near $4,614 per ounce, while MCX gold weakened by 0.80% to Rs 1,51,352. This decline has trimmed gold's gains for the year to 7%, indicating a cooling phase after a robust rally earlier in 2026. The drop occurred despite persistent tensions around the Strait of Hormuz, suggesting that macro factors are currently driving gold more than safe-haven demand. Higher oil-driven inflation pushed US yields upward (30-year yield around 5.03%, 2-year yield around 3.99%) and delayed expectations of Federal Reserve rate cuts, putting pressure on gold.
Demand Remains Strong
On the positive side, demand for gold remains robust, as per the World Gold Council. Global gold demand stood at 1,231 tonnes, up 2% year-on-year, with value jumping 74% to $193 billion. This was supported by bar and coin demand of 474 tonnes, up 42%, ETF inflows of 62 tonnes, and central bank purchases of 244 tonnes, up 3%. In India, total demand rose to 151 tonnes, up 10% year-on-year, led by investment demand of 82 tonnes, up 54%, while jewellery demand fell to 66 tonnes, down 19%. This indicates a clear shift toward investment despite higher prices, which is helping support gold prices in the medium term even as short-term pressure continues.
Focus for the Week
Gold entered this week with a bearish bias but has rebounded strongly after the US President signaled 'great progress' in talks with Iran. Prices are up 0.50% so far this week. However, despite the US downplaying a return to war, continued incidents near the Strait of Hormuz and uncertainty over a deal are keeping inflation concerns elevated. This raises expectations of rate hikes by the Federal Reserve, putting pressure on gold, which has already fallen over 12% since late February. Markets will closely track US macro data, including non-farm payrolls, unemployment trends, and updates on the US Treasury's borrowing plans, alongside commentary from Federal Reserve officials. Any signs of easing inflation or softening growth could provide support to gold, while continued strength in yields and the dollar may keep prices under pressure.
Technical Levels and Near-Term Outlook
Gold (Spot) CMP: $4,560
Support: $4,450 / $4,340
Resistance: $4,700 / $4,850
MCX Gold CMP: Rs 1,49,750
Support: Rs 1,46,000 / Rs 1,42,800
Resistance: Rs 1,54,300 / Rs 1,59,200
Overall, the current rebound in gold is expected to extend towards the initial resistance of $4,700 and then reverse course, considering ongoing geopolitical developments and macroeconomic uncertainty keeping the short-term trading range of $4,700 and $4,450 intact. While short-term upside appears capped by higher yields and a firm dollar, the broader long-term outlook for gold remains constructive, supported by resilient investment demand, continued central bank buying, and persistent global uncertainties.
Silver Outlook
Talking about silver, the rally that began in 2025 and peaked in late January was driven by expectations of multiple rate cuts in 2026. With those expectations now fading and the Federal Reserve signaling higher-for-longer rates, silver is likely to struggle to sustain at higher levels in the near term. International spot silver has also rebounded and is trading near $75.80 (Rs 2,51,460). The metal is currently close to its strong resistance level of $76 and has the potential to test $78/$80 if this level is breached. However, any reversal from here could push prices back toward $73/$71. On the MCX, silver is trading around Rs 2,51,460, near strong resistance at Rs 2,52,000. A breakout above this level could take prices toward Rs 2,58,500, while failure to sustain above it may lead to a pullback toward Rs 2,42,000 and Rs 2,35,400.
Disclaimer: Recommendations and views on the stock market, other asset classes or personal finance management tips given by experts are their own. These opinions do not represent the views of The Times of India.
