Summary of this article
Gold prices touch new high of $5,000 per ounce, silver prices also rise
Prices of precious metals surge amid geopolitical tensions and demand for safe-haven assets
Gold prices touched new record highs, crossing the USD 5,000 per ounce mark as investors turned to safe-haven assets amid geopolitical uncertainties and a weak dollar. Investors and central banks rushed to the yellow metal due to concerns over US President Donald Trump’s trade policies on several US allies.
Gold prices in the spot market were trading at USD 5,074.56 per ounce, steadying after touching USD 5,102.56 an ounce on January 26. Meanwhile, the gold future for April was trading at USD 5,107.26 an ounce, retreating from highs of USD 5,138.40 an ounce.
During the weekend, Trump threatened to impose 100 per cent tariffs on Canada if it proceeds with a free trade agreement with China. Trump also said that he was raising tariffs on South Korean automobiles, lumber, and pharmaceuticals imports to 25 per cent, saying that Seoul was delaying enacting the recent trade deal. This kept investors on the watch out for any more such development by Trump amid volatility in global markets.
Geopolitical tensions in the West Asia region, as reports of US aircraft carriers entering the region renewed fears that the US could strike Iran, which also kept investors on edge.
“Rising geopolitical tensions, concerns over global growth, and volatility in equity markets boosted safe-haven demand…Additionally, strong central-bank gold purchases and persistent inflation concerns supported gold,” Jigar Trivedi, Senior Research Analyst - Currencies & Commodities, at Reliance Securities, explained.
Investors also anticipated that the US Federal Reserve would keep interest rates unchanged in the meeting this week, which also maintained a risk-off sentiment in the broad markets. Additionally, the breakout was also driven by the dollar weakness, with the dollar index dipping to 97.12.
Meanwhile, silver prices also touched new highs with USD 117.15 per ounce on January 26. Since then, silver prices have steadied at USD 107.93 an ounce, but the rise in safe-haven assets demand is expected to keep the price of the white metal on the rise. This, combined with firm industrial demand for silver, is also expected to aid silver prices.
“…Silver benefited from both safe-haven flows and robust industrial demand from sectors such as solar energy, EVs, and electronics,” Trivedi said. “Speculative and ETF inflows further amplified the rally, especially in silver, which is structurally more volatile.”
Market participants expect prices of precious metals to remain bullish but see volatility in prices.
“On Comex, gold is likely to trade in the USD 5,400–5,600 per ounce range, while silver may fluctuate widely between USD 100–125 per ounce. On MCX, gold prices could remain firm around Rs 1.48–Rs 1.75 lakh per 10 grams, influenced by USD-INR movement, and silver may trade near Rs 3.0–Rs 4.0 lakh per kg. Overall, the trend stays bullish, but intermittent corrections are possible due to profit-booking,” Trivedi said.
