New Delhi: Gold prices are likely to trade firm next week as traders await key economic data, including US inflation numbers, for fresh cues on interest rate outlook, while silver may remain volatile amid shifting risk sentiment and speculative activity, analysts said.
Traders will look for cues from US GDP, PMI, non-farm payroll and inflation data. Also, inflation readings from China, Germany, and India will also be keenly watched. Speeches from US Federal Reserve officials will be closely tracked as well for indications on the timing of potential rate cuts and their impact on bullion prices, they added.
“Gold consolidation and recovery suggest that bias still remains positive. However, in case of silver, we remain cautious of volatility and further corrections,” Pranav Mer, Vice President, EBG – Commodity & Currency Research, JM Financial Services, said.
During the past week, gold futures climbed Rs 7,698, or 5.2 per cent, while silver slumped Rs 15,760 or nearly 6 per cent on the Multi Commodity Exchange. The commodities market remained open on Sunday due to the presentation of the Union Budget by Finance Minister Nirmala Sitharaman.
“Gold and silver endured an extremely volatile week as a sharp dollar rebound, shifting Fed expectations and aggressive position unwinding triggered one of the steepest corrections in decades,” Manav Modi, Analyst – Commodities, Motilal Oswal Financial Services Ltd (MOFSL), said.
He said easing tensions between Washington and Tehran, progress in tariff negotiations by President Donald Trump and reduced risk of a US government shutdown lowered safe-haven premiums, while Kevin Warsh being nominated as the next Fed Chair also prompted traders to scale back aggresive rate-cut expectations.
“The unwind was severe: gold recorded its sharpest decline in nearly four decades, while silver languished, amplified by heavy call option positioning, margin calls and speculative driven liquidation,” Modi noted.
The domestic markets were not spared from the turmoil. Though the Union Budget largely met expectations with no major-specific surprises, volatility in bullion persisted amid swings in the rupee. A softer USD/ INR following progress on a potential trade deal between New Delhi and Washington, which pressurised local bullion prices.
Despite the steep selloff, Modi explained that signs of stabilisation emerged as forced liquidation eased and value buying returned across both metals.
“A sharp rebound followed, aided by weaker economic data and value buying after a near 15 per cent correction in gold,” he said adding that domestic gains were further supported by rebound in USD/ INR from recent lows.
In the international market, gold gained USD 234.7, or nearly 5 per cent, over the past week on the Comex, recovering to USD 5,000 per ounce from a low of USD 4,400 per ounce.
“There has not been much change in the fundamentals, as geopolitical uncertainty still prevails. Central banks and ETFs investors continue to add gold to their holdings, while crypto firms have also increased buying to create & trade gold tokens, backed by physical assets,” Mer said.
However, silver futures remained under pressure, slipping USD 1.63, or 2.08 per cent.
“Volatility grips silver as prices pass through a phase of high swings after the parabolic rally that ended on January 30 with a flash crash from an all-time high around USD 121 to a recent low of USD 64 per ounce,” Pranav Mer of JM Financial Services said.
According to Manav Modi, physical demand from China ahead of the Lunar New Year, has remained resilient and could help absorb further selling.
“Broader fundamentals still support bullion through 2026, driven by central bank buying, fiscal concerns and geopolitical risks, though near-term volatility is likely to remain elevated,” he said.
Analysts said that macroeconomic data and remarks from Fed officials are poised to dominate next week’s agenda, traders expect continued volatility but see opportunities for short-term buying on dips, especially in gold.
PTI
