Why gold and silver are holding firm despite global uncertainty

Gold and silver prices extended their gains on Tuesday (November 11), supported by expectations of a US Federal Reserve rate cut in December and relief over the resolution of the prolonged US government shutdown. In India, seasonal jewellery demand and steady investor interest added further strength to bullion prices.

In India, 24-karat gold was priced around ₹12,628 per gram, while 22-karat gold traded at ₹11,575 per gram. For 18-karat gold, prices stood near ₹9,471 per gram.

Local demand has inched up as the ongoing wedding season boosts jewellery purchases and gold continues to serve as a preferred inflation hedge.

Silver prices also moved higher to ₹160 per gram or ₹1.60 lakh per kilogram, with support coming from both festive buying and industrial demand.

According to Aksha Kamboj, Vice President of the India Bullion & Jewellers Association (IBJA), investor sentiment has turned more optimistic amid expectations of monetary easing and stable inflation trends.

“Gold prices have seen a small but steady rise as market confidence improves. The wedding season is driving local consumption, while investors view gold as a stable alternative in an uncertain global environment,” Kamboj said.

Globally, spot gold climbed 0.7% to $4,142.83 per ounce, its highest since October 24, while US gold futures for December delivery rose to $4,148.50. Silver firmed 0.5% to $50.80 per ounce.

The US Senate’s passage of a deal to end the federal government shutdown improved investor confidence, easing uncertainty that had stalled key data releases such as non-farm payrolls.

With the shutdown ending, markets expect clearer signals on the US economic outlook and the Fed’s next steps.

Traders are now pricing in a 64% probability of a 25-basis-point rate cut in December, according to CME’s FedWatch tool. Fed Governor Stephen Miran has suggested a larger 50-basis-point cut could be appropriate, given falling inflation and a gradual rise in unemployment.

Analysts say these developments make gold attractive as a non-yielding, defensive asset.

Analysts see continued support from policy and demand

Rahul Kalantri, Vice President – Commodities at Mehta Equities, said that bullion opened the week on a strong note as lower dollar levels and safe-haven demand encouraged buying.

“Gold has support at $4,065–$4,020 an ounce and resistance around $4,135–$4,155 an ounce. In rupee terms, gold support lies near ₹1.22 lakh per 10 grams with resistance at ₹1.25 lakh per 10 grams,” Kalantri said.

Longer term, investment banks such as J P Morgan remain constructive, projecting gold prices to remain well supported due to continued central bank purchases and diversification away from the dollar.

The bank expects gold to potentially test $5,000 per ounce in 2026 if easing trends persist.

-With Reuters inputs