Synopsis: After two months of steady gains, gold and silver prices are slipping as a stronger dollar, easing global tensions, and changing Fed expectations weigh on investor sentiment. Analysts say the correction may be temporary, with lower inflation and potential rate cuts offering fresh support ahead.
After weeks of dazzling performance, gold and silver are witnessing a correction. The two precious metals, which had been rallying for nearly two months, are now losing momentum — and the reasons are rooted in both global politics and economic fundamentals.
According to Rahul Kalantri, VP–Commodities at Mehta Equities Ltd., “The pullback was primarily driven by a stronger dollar index and encouraging developments in U.S. trade negotiations with China and India.” He further noted, “Sentiment was influenced by Gaza peace progress, leading to profit-taking across the board.”
Simply put, when geopolitical tensions ease and the U.S. dollar strengthens, investors tend to exit safe-haven assets like gold and silver. The move signals renewed confidence in riskier markets.
However, Kalantri believes the bullion rally may not be over yet. “Lower-level buying has re-emerged as softening inflation data and expectations of Fed rate cuts lent support to the bullion complex,” he said.
Market Outlook: What’s Next for Gold and Silver?
All eyes are now on an action-packed week of global central bank decisions. The U.S. Federal Reserve is widely expected to announce a 25-basis-point rate cut following softer inflation numbers, while both the European Central Bank (ECB) and Bank of Japan (BoJ) are likely to maintain their current policies.
From a technical perspective, Kalantri outlined key support and resistance levels:
- Gold: Support at ?1,22,470–?1,21,780, Resistance near ?1,23,950–?1,24,800
- Silver: Support at ?1,46,250–?1,45,150, Resistance near ?1,47,950–?1,48,780
Meanwhile, Darshan Desai, CEO of Aspect Bullion & Refinery, pointed out that fading safe-haven demand continues to pressure prices. “Gold prices are falling as optimism over a potential US–China trade deal and a stronger US dollar dampen investor demand,” he said.
But Desai also warned that the volatility is far from over. “This week is crucial for the bullion market, with key events including the meeting between US President Donald Trump and Chinese President Xi Jinping, the Fed announcement, and several major tech earnings reports.”
If the Fed signals fewer rate cuts than expected, gold prices could face more downside. Conversely, any dovish policy comments or renewed geopolitical tensions could reignite demand and restore bullion’s shine.
In short, the current dip may just be a pause before the next rally—especially if macroeconomic uncertainty makes investors return to the comfort of precious metals.
Disclaimer: This article is for informational purposes only and should not be considered financial or investment advice. Market conditions are subject to change based on global economic developments and policy decisions.
