Gold and silver prices continue to face downward pressure as macroeconomic factors weigh heavily on precious metals. According to Vedika Narvekar, Research Analyst at Anand Rathi Shares and Stock Brokers, the near-term outlook for both metals remains weak.
Recent Price Action
Spot gold and silver ended last week sharply lower, declining nearly 3.7% and 5.4% respectively. The weakness has persisted this week, with both metals losing an additional 1.5%. A hotter-than-expected inflation print, elevated oil prices, and rising US Treasury yields have continued to pressure non-yielding assets like gold and silver. Sentiment weakened further as markets increased bets on additional rate hikes, while a stronger US dollar added to the downside pressure.
Factors Affecting Gold
Gold also faced pressure from expectations of softer Indian demand following recent policy and import duty changes. India remains one of the world's largest consumers and importers of gold, making its demand trends crucial for global prices. On the positioning side, Asian investors reduced futures longs and sold ETFs, while North American investors continued to add ETF inflows and increase net long positions. International spot gold is currently trading near $4,475 per ounce and has fallen nearly 15% since the Iran conflict began, as markets scale back expectations of aggressive monetary easing.
Silver's Volatility
Silver has remained highly volatile in recent sessions. After rallying strongly toward $90 per ounce earlier last week on optimism around AI-related demand and data-center infrastructure growth, prices corrected sharply and recently traded near $73.5 per ounce. Rising bond yields and concerns over prolonged higher interest rates triggered profit booking across precious metals. However, unlike gold, silver also benefits from strong industrial demand due to its extensive use in electronics, solar panels, semiconductors, EVs, and advanced technology applications. This industrial demand continues to support silver's longer-term outlook despite short-term price weakness.
Focus for the Week
Inflation and interest rates will remain the key drivers for gold and silver in the week ahead. Markets will closely watch the FOMC Meeting Minutes for further clarity on the Federal Reserve's outlook and any guidance on future rate moves. The minutes are expected to reinforce the view that the easing cycle may be nearing an end, which could continue to keep pressure on precious metals.
Technical Levels and Near-Term Outlook
Gold (Spot)
- Current Market Price: $4,470 per ounce
- Support: $4,350 / $4,4099
- Resistance: $4,850 / $5,000
MCX Gold
- Current Market Price: ₹1,58,600
- Support: ₹1,54,000 / ₹1,45,000
- Resistance: ₹1,72,000 / ₹1,84,000
The overall bias for gold remains slightly negative in the near term. However, it is important to note that gold is approaching the lower end of its recent consolidation range between $4,400 and $4,800. Any headlines related to a ceasefire or de-escalation in geopolitical tensions could trigger temporary rebounds or short-covering rallies in gold prices.
Silver Outlook
For silver as well, the near-term bias remains weak due to the high interest rate environment and its potential impact on economic growth and industrial demand. However, the long-term structural demand outlook remains positive, supported by growing usage in solar energy, electronics, EVs, and advanced technologies.
International Silver
- Current Market Price: $74.80 per ounce
- Support: $71 / $67.5
- Resistance: $82 / $85
MCX Silver
- Current Market Price: ₹2,70,000
- Support: ₹2,57,000 / ₹2,44,000
- Resistance: ₹2,96,000 / ₹3,05,000
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.
