What is the story about?
Gold prices moved higher amid volatile trade as geopolitical risks, uncertainty over US monetary policy and market positioning combined to support demand for safe-haven assets, analysts said. Silver prices followed a similar trajectory, though with sharper intraday swings.
Geopolitical uncertainty emerged as a key driver after reports of US military action involving Venezuela’s leadership. The development injected fresh risk premium into global markets, particularly given Venezuela’s significance in the global oil supply chain.
Fears of broader disruption encouraged investors to increase exposure to precious metals.
Federal Reserve expectations also shaped bullion sentiment. Markets are closely watching upcoming US economic indicators, including manufacturing activity and labour market data, along with commentary from Federal Reserve officials. These inputs are expected to influence the interest-rate outlook, a critical factor for non-yielding assets such as gold.
Market positioning and profit booking added to volatility. After touching record highs in late December, gold prices corrected last week as investors booked profits at elevated levels, while year-end holidays led to thinner liquidity.
On the Multi Commodity Exchange (MCX), gold futures retreated from all-time highs but remained within a wide trading range, reflecting ongoing two-way interest.
Silver volatility was amplified by technical factors in overseas markets. International prices declined sharply after margin requirements for futures trading were raised, forcing leveraged participants to pare positions and triggering short-term selling pressure.
Despite the recent pullback, underlying support remains intact, aided by a softening US inflation backdrop and sustained investor caution. Analysts note that gold has continued to hold above key psychological levels, indicating persistent demand amid macro and geopolitical uncertainty.
Looking ahead, analysts expect price swings to remain elevated, with near-term direction dependent on incoming US data, the Fed’s policy tone and the evolution of geopolitical risks. While the broader outlook for precious metals remains constructive, intermittent corrections are likely in a highly reactive market environment.
-With Reuters inputs
Geopolitical uncertainty emerged as a key driver after reports of US military action involving Venezuela’s leadership. The development injected fresh risk premium into global markets, particularly given Venezuela’s significance in the global oil supply chain.
Fears of broader disruption encouraged investors to increase exposure to precious metals.
Federal Reserve expectations also shaped bullion sentiment. Markets are closely watching upcoming US economic indicators, including manufacturing activity and labour market data, along with commentary from Federal Reserve officials. These inputs are expected to influence the interest-rate outlook, a critical factor for non-yielding assets such as gold.
Market positioning and profit booking added to volatility. After touching record highs in late December, gold prices corrected last week as investors booked profits at elevated levels, while year-end holidays led to thinner liquidity.
On the Multi Commodity Exchange (MCX), gold futures retreated from all-time highs but remained within a wide trading range, reflecting ongoing two-way interest.
Silver volatility was amplified by technical factors in overseas markets. International prices declined sharply after margin requirements for futures trading were raised, forcing leveraged participants to pare positions and triggering short-term selling pressure.
Despite the recent pullback, underlying support remains intact, aided by a softening US inflation backdrop and sustained investor caution. Analysts note that gold has continued to hold above key psychological levels, indicating persistent demand amid macro and geopolitical uncertainty.
Looking ahead, analysts expect price swings to remain elevated, with near-term direction dependent on incoming US data, the Fed’s policy tone and the evolution of geopolitical risks. While the broader outlook for precious metals remains constructive, intermittent corrections are likely in a highly reactive market environment.
-With Reuters inputs
