Silver climbs sharply, gold follows | Experts warn of market volatility ahead

Silver prices surged by Rs 4,000, or 1.5%, to Rs 2,68,500 per kilogram (inclusive of all taxes) from Tuesday’s closing of Rs 2,64,500, as per the All India Sarafa Association.

Meanwhile, 99.9% pure gold inched up by Rs 600, or 0.4%, to Rs 1,61,300 per 10 grams, compared with Rs 1,60,700 recorded in the previous session.

Saumil Gandhi, Senior Analyst, Commodities, HDFC Securities, explained the movement: “Gold and silver advanced on Wednesday supported by growing expectations of a more aggressive rate cut by the Federal Reserve.” He added that softer US economic data, particularly weaker-than-expected retail sales for December, signalled a slowdown in consumer spending, heightening concerns over moderating growth.

“Post-data, markets now price in a higher probability of three Fed rate cuts this year, up from two just a week ago. Lower interest rates typically favour non-yielding metals such as gold and silver,” Gandhi said.

In global markets, spot silver rose USD 4.71, or nearly 6%, to USD 85.51 per ounce, while gold increased 1.06% to USD 5,078.72 per ounce. Praveen Singh, Head of Commodities, Mirae Asset ShareKhan, noted that spot gold’s rise was supported by a weaker US dollar and anticipation of crucial US nonfarm payroll data for January. “The release of employment data is likely to trigger volatility in global precious metals markets,” Singh added.

Geopolitical tensions also played a role in driving safe-haven demand. Gandhi highlighted that Washington is reportedly considering intercepting tankers carrying Iranian crude and may deploy additional naval assets if nuclear negotiations with Iran fail, further supporting prices of gold and silver.

Analysts say that rising global demand for precious metals, combined with expectations of lower US interest rates and a weaker dollar, continues to underpin buying interest in the domestic market.
(With PTI inputs)