Gold rises for fifth session, silver surges: A look at what’s driving prices

Gold prices extended gains for a fifth straight session on Friday (January 23), while silver outperformed with a sharp jump, as a softer US dollar and shifting risk sentiment kept precious metals in focus.

In early Asian trade, spot gold rose 0.3% to $4,951.47 per ounce, moving closer to the $5,000 an ounce mark. Spot silver climbed 1.7% to $97.85 per ounce.

What is driving gold and silver?

The latest move came as the US dollar hovered near its lowest levels of the year, after recording its biggest one-day fall in six weeks. A weaker dollar typically supports dollar-priced commodities like gold and silver by making them cheaper for non-US buyers.

Precious metals also reacted to changes in global risk appetite after markets took comfort from US President Donald Trump dialling back tariff threats on European goods and ruling out taking control of Greenland by force. The easing of trade and geopolitical concerns helped risk assets stabilise, even as traders remained alert to fresh policy surprises.

“Policy uncertainty remains high,” Societe Generale analysts said, noting that further twists in policy direction could still emerge.

How rates and central bank cues are shaping sentiment?

Markets are also watching central bank policy signals across the globe. Traders are widely expecting the Bank of Japan to keep rates unchanged at its latest policy meeting.

In the US, Fed funds futures indicate a 96% probability that the Federal Reserve will keep rates on hold at its upcoming January 28 meeting, keeping yields and the dollar in check. The US 10-year Treasury yield stood around 4.247%.

What analysts are saying?

NS Ramaswamy, Head of Commodity & CRM at Ventura, said gold has entered 2026 with strong momentum and is nearing a critical long-term point. He flagged supportive monetary conditions, safe-haven demand, trade frictions, tightening supplies, ETF inflows and central bank diversification away from US assets as key tailwinds.

At the same time, he cautioned that profit-taking from overbought levels remains possible, and listed key headwinds such as easing geopolitical tensions, stronger US data that could push yields higher, a firmer dollar, weaker physical demand due to high prices, and slower central bank purchases.

Ravi Singh, Chief Research Officer at Master Capital Services, advised investors to remain cautious due to volatility, suggesting that those looking to build exposure may consider staggered allocations such as monthly SIP-style investing to average costs, while viewing precious metals primarily as a diversification tool rather than a return asset.

What next?

Traders are now tracking the next set of global cues, including US inflation data, for signs of where interest rates and the dollar could head next. With gold close to a psychological milestone and silver showing stronger momentum, the near-term direction is likely to depend on whether risk sentiment stays calm—or policy uncertainty re-emerges.

-With Reuters inputs