Gold, silver trade higher in India: Why Tata MF remains bullish on precious metals

Gold and silver prices traded higher in the domestic market on Friday (June 12), tracking a recovery in global bullion prices as investors assessed geopolitical developments in the West Asia, inflation trends and the outlook for global interest rates.

MCX gold futures were trading around ₹1.49 lakh per 10 grams during the session after recovering from intraday lows, while silver also advanced in line with gains seen in international markets.

Globally, COMEX gold rose

above $4,200 per ounce, while silver climbed more than 4% an ounce, supported by renewed buying interest in precious metals.

Analysts attributed the rebound to easing concerns over a potential escalation in the West Asia after signs emerged of progress in discussions between the United States and Iran. Softer crude oil prices and weakness in the US dollar also lent support to bullion prices.

Prithviraj Kothari, Managing Director of RiddiSiddhi Bullions and President of the India Bullion and Jewellers Association (IBJA), said gold and silver rebounded sharply after testing key support levels earlier this week. According to him, optimism surrounding a possible US-Iran peace agreement helped improve sentiment across commodity markets, while lower oil prices reduced inflation concerns and weighed on the dollar.

Kothari noted that both gold and silver have recovered from recent lows, with investor sentiment improving as markets monitor developments in the West Asia and the outlook for monetary policy.

Technical indicators also suggest that domestic gold prices have found support in the ₹1.46 lakh -₹1.47 lakh per 10 grams range.

Ravi Singh, Chief Research Officer at Master Capital Services, said MCX gold futures recovered after finding support near those levels. He added that as long as prices remain above the support zone, the recovery could extend further, with ₹1.51 lakh per 10 grams emerging as an immediate resistance level.

Despite the rebound, investment managers expect volatility to persist in the near term.

In its June outlook, Tata Mutual Fund said gold prices may consolidate amid mixed macroeconomic signals, including expectations of higher interest rates, a stronger US dollar and elevated bond yields. The fund house said geopolitical developments, particularly those linked to the US-Iran situation, could lead to short-term fluctuations in prices.

For Indian investors, Tata Mutual Fund said rupee depreciation could help cushion downside risks in domestic gold prices even if international bullion markets remain under pressure. The fund house maintained a bullish long-term outlook on gold, citing continued central-bank purchases, geopolitical uncertainties and high global debt levels as supportive factors.

On silver, Tata Mutual Fund said the metal continues to benefit from its dual role as both a precious and industrial commodity. While short-term consolidation cannot be ruled out, long-term demand from sectors such as solar energy, electric vehicles and semiconductors is expected to remain supportive. The fund house recommended a staggered investment approach for investors given silver's relatively higher volatility.