Amid rising geopolitical tensions in West Asia and prevailing global trends, silver prices witnessed a significant surge in the Delhi bullion market. Conversely, the upward trajectory in gold prices which had persisted for the past three days came to a halt. Market experts attribute this divergent movement to the strengthening of the US dollar and rising global crude oil prices.
What Are The Latest Prices For Gold And Silver?
According to data released by the All India Bullion Association, the price of the white metal (silver) jumped by ₹1,500 or 0.54 percent to reach ₹276,500 per kilogram (inclusive of all taxes). Notably, just the previous day silver had closed at ₹275,000 following a sharp decline of ₹4,275. In contrast, the price of 99.9 percent pure gold fell by ₹400 to settle at ₹165,200 per 10 grams (inclusive of all taxes). It had closed at ₹165,600 per 10 grams in the previous trading session, thereby bringing an end to gold’s three-day rally.
What Is The Reason Behind The Divergent Movement In Gold And Silver Prices?
Market analysts believe that investors are closely assessing current geopolitical developments and US macroeconomic indicators. According to Gaurav Garg, a Research Analyst at the Lemon Markets Desk, “Gold has witnessed a marginal decline due to a strong dollar and concerns regarding inflation. On the other hand, amidst US-Iran tensions, traders perceive excellent buying opportunities in silver, which is helping the metal maintain its strength.” In the international market, spot silver surged by a robust $1.25 (1.47%) to reach $86.99 per ounce. Meanwhile, spot gold traded marginally higher at $5,178.45 per ounce.
What Are The Key Factors Influencing The Market?
Direct connection to crude oil : Praveen Singh, research analyst at Mirae Asset Sharekhan, noted that spot gold is trading in a narrow range of $5,100-5,250 per ounce, in contrast to crude oil prices. Iran has warned that attacks on merchant ships and rising tensions in the Persian Gulf could push crude oil prices to a record high of $200 per barrel.
Inflation and a strong dollar : According to Saumil Gandhi, senior analyst (commodities) at HDFC Securities, the recent US Consumer Price Index (CPI) has not yet reflected the full impact of rising fuel costs following the Middle East crisis. Rising energy prices and strong economic data have supported US Treasury yields and the dollar, putting pressure on precious metals.
What Could Happen Next In The Bullion Market?
Rising price pressures could lead major central banks to adopt a cautious approach to interest rate cuts. According to Jatin Trivedi, VP Research Analyst at LKP Securities, investors are now eyeing the US Core Personal Consumption Expenditure (PCE) price index and GDP data, to be released on Friday. These figures will play a key role in determining the future direction of the US Federal Reserve’s interest rates.
