Gold and silver, which had been on a strong upward trajectory for nearly two months, are now witnessing a decline as global market dynamics shift. The precious metals, long favored as safe-haven assets during times of uncertainty, have begun to lose some of their recent luster. This cooling off comes as a combination of factors—including a strengthening U.S. dollar, easing geopolitical tensions, and changing expectations from the Federal Reserve—have prompted investors to take profits and reallocate funds toward riskier assets.
According to Rahul Kalantri, Vice President of Commodities at Mehta Equities Ltd., the recent correction was largely triggered by a firmer dollar index and encouraging developments in ongoing trade negotiations between the United States, China, and India. He noted that progress in Gaza peace talks further dampened the need for safe-haven assets, leading many traders to lock in gains after an extended rally. When global uncertainties begin to ease and the U.S. dollar shows strength, investors typically reduce their exposure to gold and silver, which are priced in dollars. As a result, the demand for bullion tends to weaken, leading to a softening in prices.
However, the outlook is not entirely negative. Kalantri emphasized that there has been renewed buying interest at lower price levels, particularly as inflationary pressures appear to be easing and expectations of a near-term rate cut by the Federal Reserve gain traction. A potential reduction in U.S. interest rates would make non-yielding assets like gold more attractive again, lending support to the broader bullion market. Thus, while the recent decline reflects short-term market sentiment, underlying fundamentals still provide some cushioning for prices.
The week ahead is expected to be eventful for global financial markets, with several central bank meetings scheduled. The U.S. Federal Reserve is widely anticipated to implement a modest 25-basis-point rate cut following weaker-than-expected inflation data. Meanwhile, the European Central Bank and the Bank of Japan are expected to maintain their current policy stance. These decisions, coupled with the Fed’s accompanying commentary, will be closely scrutinized by traders for clues about the pace and extent of future rate adjustments.
On the technical front, Kalantri identified immediate support for gold around ₹1,22,470–₹1,21,780 per 10 grams, while resistance levels are projected near ₹1,23,950–₹1,24,800. For silver, he sees a support zone between ₹1,46,250–₹1,45,150 and resistance around ₹1,47,950–₹1,48,780. These ranges indicate that while short-term volatility may persist, significant breakdowns or rallies will likely depend on external triggers, particularly from monetary policy decisions and geopolitical news.
Darshan Desai, CEO of Aspect Bullion & Refinery, echoed similar sentiments, noting that waning safe-haven demand has exerted downward pressure on prices. “Gold prices are retreating as investors grow more optimistic about a possible U.S.–China trade agreement and as the U.S. dollar strengthens,” Desai said. He cautioned, however, that market volatility remains high, especially with multiple major developments on the horizon.
Desai highlighted that this week could prove pivotal for the bullion market. Key events such as the anticipated meeting between U.S. President Donald Trump and Chinese President Xi Jinping, the Federal Reserve’s policy announcement, and several major corporate earnings reports could all significantly influence market direction. If the Fed signals fewer rate cuts than currently expected, gold could face further downward pressure. Conversely, any dovish tone from the central bank or renewed geopolitical uncertainty could quickly restore demand for safe-haven assets, allowing gold and silver to regain their shine.
In essence, while gold and silver have lost some momentum after a sustained rally, their long-term appeal as hedges against uncertainty remains intact. The next few sessions will likely be shaped by macroeconomic signals and investor reactions to global policy developments, determining whether this correction turns into consolidation—or a temporary pause before another leg higher.
