Gold and silver prices have been gaining steady rising in the last few trading sessions owing to renewed geopolitical concerns and subdued economic data driving up the precious metals.
In the last fortnight, gold prices have gained nearly 6.5 percent on Comex – the platform for precious metal F&O trades - while silver has seen a rally of more than 10 percent. Incidentally, the same period saw the Indian benchmark indices - Sensex and Nifty - almost flat at a time of heightened volatility.
Data from Bloomberg shows that gold was at $3216 per ounce on May 14, and since then has risen to nearly $3423 on Comex. In the recent sessions, precious metals have gained ground, with a few sessions seeing a jump of over two percent. Similarly, for silver, the prices have moved up from $32.44 per ounce on May 14 to nearly $36, which is a gain of over 10 percent. Read More
In India, the prices of precious metals have gained, mirroring the global trend, though the quantum of rise is lower compared to the international market. On MCX, gold prices gained a little over 3.5 percent while silver is up 5.25 percent since May 14. Read More
Experts attribute the recent rally to a combination of factors including Russia-Ukraine conflict, global trade war concerns, and central bank meets scheduled in the near future.
“Gold prices remain elevated as renewed trade uncertainty resurfaces, following President Trump’s decision to double tariffs on steel and aluminium imports from 25% to 50%,” said Chintan Mehta, CEO, Abans Financial Services.
"This move has reignited fears of a global trade war and raised fresh concerns about inflation, which could delay any potential rate cuts by the Federal Reserve. If rate cuts do materialize, gold could benefit further as a non-yielding asset. And if the Fed holds off due to inflation worries, continued uncertainty is likely to keep gold prices supported," added Mehta. "While we see potential for further gains, any delay in rate cuts could trigger short-term corrections. However, such dips may present buying opportunities for long-term investors," he said.
Similarly, Jateen Trivedi, VP Research Analyst - Commodity and Currency, LKP Securities said the sentiment in the bullion market is positive, following tariff and economic outlook concerns among other things.
"Gold prices traded higher, supported by a weaker dollar and renewed safe-haven demand amid lingering tariff uncertainty and US debt concerns. Comex gold scaled above $3395, while MCX gold gained Rs 500 to trade above Rs 98,450. The broader sentiment in the bullion space remains positive, driven by geopolitical tensions and ongoing imbalance in global trade and financial dynamics," said Trivedi.
Kumar Jain, National Spokesperson, India Bullion and Jewellers Association (IBJA) says that in the Indian context, the marriage season is also a factor for driving gold prices further.
"While factors like Trump's tariff war and central bank buying were pushing up prices of precious metals, the wedding season was a big catalyst in the Indian market. As things stand now, gold prices are likely to rise further," he said.
More importantly, most experts are bullish in the near-term and believe that gold prices will rise further though there could be in-between bouts of consolidation.
“Overall bias remains positive amid rising economic uncertainty due to tariffs, weaker than expected US data and falling treasury yields & the dollar index,” said Pranav Mer, Vice President, EBG - Commodity & Currency Research, JM Financial Services.
“Gold prices may see some consolidation ahead of the ECB policy meeting out later in the day and the US employment data on Friday. On charts, the trend remains positive till holding above support at Rs. 97,850/ 97,650, while on the upside prices may test Rs. 98,650/ 99,000," he added.
Disclaimer: The views and investment tips expressed by experts on Moneycontrol are their own and not those of the website or its management. Moneycontrol advises users to check with certified experts before taking any investment decisions.
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