Gold and Silver Prices Reach Record Highs Amid Weakening Dollar
On January 27, gold and silver prices soared to unprecedented levels, driven by the ongoing weakness in the US dollar and expectations of rate cuts by the US Federal Reserve. In the Indian market, MCX gold February futures saw a significant increase of 1.48%, reaching Rs 1,58,343 per 10 grams. Similarly, MCX silver March futures surged by 6.56% to Rs 3,56,670 per kg.
Earlier in the day, gold peaked at Rs 1,59,820 per 10 grams, marking a 2.4% increase before experiencing a slight decrease due to profit-booking activities.
Global markets also witnessed a surge in gold and silver prices, with geopolitical tensions prompting investors to seek refuge in safe-haven assets. Concerns over a potential government shutdown in the US and President Donald Trump’s threats of imposing 25% tariffs on South Korean imports contributed to the escalating trade tensions. Trump’s warnings to Canada regarding possible tariffs further fueled market apprehensions.
In the US, gold futures for April contracts rose by approximately 1% to $5,113.70 per troy ounce as the dollar index showed a marginal decline of 0.1%, making gold more affordable in international currencies.
The persistent demand for safe-haven assets, ongoing central bank acquisitions, and expectations of accommodative global monetary policies continue to support the upward trajectory of gold and silver prices.
COMEX Silver broke the $99 mark, reaching new all-time highs, signaling strong market sentiment towards precious metals.
As the Federal Open Market Committee (FOMC) convenes for a two-day meeting in the US, market participants anticipate a decision to maintain current interest rates, with potential rate cuts expected later in the year.
Rahul Kalantri, VP Commodities at Mehta Equities Ltd., noted, “Market attention has now shifted to the upcoming Federal Reserve announcement, amidst ongoing speculation about political influence on the central bank. These developments have reinforced the trend of debasement, leading to significant inflows into silver and other precious metals.”
Looking ahead, gold is anticipated to find support in the range of Rs 1,57,050 to Rs 1,55,310, with resistance levels at Rs 1,59,850 and Rs 1,62,950. Similarly, silver is expected to have support at Rs 3,38,810 and Rs 3,22,170, with resistance at Rs 3,55,810 and Rs 3,62,470, according to analysts.
Another market expert predicts that gold could potentially reach Rs 1,65,000 per 10 grams, while silver may hit Rs 3,65,000 per kg in the upcoming trading sessions.
Following silver’s remarkable surge from Rs 60,000 to Rs 3,20,000, a period of consolidation at elevated levels or potential rebalancing by market participants is likely, as indicated in a recent report.
