Gold and silver prices experienced an upward trend on Thursday, spurred by easing US Treasury yields and a rebound in global equity markets, which have enhanced investor sentiment. At the time of reporting, gold was trading at Rs 158,284 per 10 grams, reflecting a 0.18 per cent increase, while silver reached Rs 240,060 per kilogram, rising by 1.33 per cent. The recent uptrend in gold is attributed to growing buying interest, especially following its significant rally.

Ponmudi R, CEO of Enrich Money, articulated that gold has extended its breakout signals after surpassing the Rs 158,000 threshold. He noted that MCX Gold opened at Rs 158,008 and is currently trading close to Rs 158,499, representing an increase of 0.32 per cent after consolidating above the previous breakout zone.

Ponmudi indicated that if gold maintains its position above Rs 158,600, it could potentially reach new resistance levels between Rs 160,000 and Rs 160,500. Should the bullish trend continue, prices might advance further toward Rs 162,000. However, investors are advised to remain vigilant regarding potential declines, identifying immediate support around Rs 156,500 to Rs 156,000 and extending to Rs 154,000 to Rs 153,300.

Silver Shows Positive Momentum Above Rs 2.4 Lakh

Silver prices have also witnessed an increase, crossing the significant Rs 240,000 per kilogram mark. Ponmudi stated that MCX silver began trading at Rs 238,500 and is currently positioned near Rs 240,108, having surged by 1.40 per cent following a steady ascent over the preceding fortnight. The next crucial resistance for silver is estimated at Rs 241,000, which if surpassed, could propel prices toward Rs 245,000 to Rs 246,000, with a possible peak at Rs 250,000.

Conversely, immediate support is identified at Rs 235,000 to Rs 234,000, with subsequent support gathering around Rs 230,000 to Rs 229,000. The Relative Strength Index (RSI) reading of 60.52 suggests a steady bullish trend, motivating the sentiment to remain constructive above Rs 240,000. However, a fall below this level could risk a decline toward Rs 235,000.

The ongoing momentum in silver aligns with the broader market trends, reflecting investors’ renewed interests in precious metals amid fluctuating conditions.

Geopolitical Concerns Linger as Key Market Factor

Even with softer US Treasury yields and stronger global equity performance fostering a positive risk sentiment, geopolitical uncertainties persist. The unresolved situation between the US and Iran remains a critical factor impacting market stability. The ongoing tensions contribute to cautious investor behaviour, as the potential for volatility increases in response to geopolitical events.

Additionally, firm crude oil prices represent a significant domestic risk, as sustained increases may elevate India’s import costs, exacerbating inflationary pressures. In general, gold often sees heightened demand during geopolitical unrest, thereby acting as a safe haven. Nevertheless, a spike in oil prices could exert broader downward pressures across financial markets.

Despite the geopolitical turbulence, market participants continue to monitor precious metals closely, weighing their potential reactions to evolving global dynamics.

Considerations for Investors Moving Forward

Investors are advised to exercise caution and avoid chasing gold and silver amidst recent price surges. Although both metals follow positive trends, their rapid appreciation increases the likelihood of short-term profit-taking. For those already invested, maintaining positions while tracking critical support levels could prove prudent.

New investors are encouraged to adopt a staggered buying approach rather than committing significant sums all at once. Gold traders should keep a close watch on the Rs 158,000 mark, while silver investors should focus on the Rs 240,000 threshold. A sustained rise beyond these resistance points may trigger further gains, while a drop below key supports could suggest an impending correction.

The overarching market sentiment remains optimistic, although investors should remain cognizant of the inherent volatility associated with precious metals, particularly following robust rallies. Long-term investment strategies, aligned with financial goals and risk tolerance, are essential for navigating the precious metals landscape effectively.

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