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Gold prices witnessed a modest yet significant rise on Wednesday, with 10 grams of 24-carat gold trading at ₹1,10,300. Alongside this, silver also experienced an uptick, trading higher as investors continue to seek refuge in precious metals amid ongoing global economic and geopolitical uncertainties. The sustained demand bolstered by inflation concerns and expectations of interest rate cuts has kept precious metals attractive in the investment landscape.
Rising Tide: Key Market Highlights
Gold price increased by ₹10 on early trade, reaching ₹1,10,300 per 10 grams for 24-carat purity
Silver gained ₹100, reflecting growing investor interest, and is trading above ₹1,30,000 per kilogram
The momentum is supported by weakened US dollar trends and dovish monetary policy expectations after softer US employment data
Central bank gold purchases globally continue to underpin prices, especially with geopolitical tensions elevating safe-haven demand
Domestic rupee depreciation adds upward pressure on gold prices in the Indian market despite import duty cuts
Global Forces Shaping Gold And Silver Prices
Gold remains a traditional hedge against uncertainty, and its climb aligns closely with shifting monetary policies worldwide. The US Federal Reserve's anticipated rate cuts have reduced the opportunity cost of holding gold. At the same time, geopolitical unrest, including trade disputes and regional conflicts, has reinforced the metal’s safe-haven status. These global dynamics, coupled with ample central bank buying, have set a firm foundation for sustained precious metals demand.
Domestic Market Dynamics: India’s Role In The Rally
Despite an import duty cut on gold earlier this year aimed at curbing black market activity and stabilizing prices, the Indian rupee’s relative weakness against the US dollar has kept gold prices elevated at domestic levels. The persistent demand, especially ahead of festive seasons, and investment appetite have helped maintain price support. Silver, too, benefits from similar factors and industrial demand, making it a favored metal among investors and traders alike.
Technical Indicators: What The Charts Suggest
Market analysts point to technical signals that highlight gold holding strong support around ₹1,01,500 per 10 grams, with resistance near the ₹1,03,000 mark. The short- to medium-term moving averages suggest upward price momentum, with relative strength indicators showing room for further gains before reaching overbought territory. Silver’s performance mirrors similar technical strength, driven by strong investor flows and industrial demand.
Potential Risks And Market Watchpoints
While the outlook remains broadly bullish, some risks linger. Any unexpected tightening of US monetary policy or a stronger US dollar could lead to price corrections. Additionally, geopolitical tensions easing faster than expected might reduce safe-haven demand. Domestic regulatory changes or shifts in import policies could also influence near-term price movements. Investors are advised to monitor these variables closely.
Looking Ahead: The Road For Precious Metals
As economic data unfolds this week, including key inflation and employment reports, markets will look for cues that may reinforce or challenge current trends. For now, gold and silver continue to shine as prudent choices amidst a mix of global uncertainty and localized market factors. This combination makes precious metals an essential component for diversified portfolios in the current environment.
Sources: Business Standard, Goodreturns, Trading Economics, Economic Times
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