Gold & Silver Hold Steady: US Fed Meeting, Geopolitics Drive Market Uncertainty

Gold and silver prices held steady on Thursday, exhibiting minor declines after experiencing intraday volatility. The market is exercising caution as it awaits the US Federal Reserve's crucial policy meeting scheduled for the following week.

Market Sentiment and Key Drivers

• Bullion trading sessions have been marked by sharp intraday fluctuations, with prices failing to sustain earlier gains. This volatility is driven by reactions to key US economic data and rising geopolitical tensions.
• The recent ADP Non-Farm Employment Change report from the US came in well below expectations. This weak data has fueled speculation about the Federal Reserve's potential policy adjustments.
• The weaker US economic outlook led to a decline in the dollar index below the 99 mark, providing momentum to precious metals.
• Investors continue to lean on gold's perceived safe-haven strength amid these global uncertainties.

Expert Analysis and Future Projections

Rahul Kalantri, VP Commodities at Mehta Equities Ltd, described the recent market as turbulent, noting support and resistance levels for gold and silver.

Ross Maxwell, Global Strategy Lead at VT Markets, highlighted that gold's outperformance in 2025 was due to a confluence of factors: continuing geopolitical tensions, policy uncertainty, a softer US dollar, falling real interest rates, and significant central bank accumulation. He also noted domestic factors like a softer Indian rupee and wedding-season demand.

Maxwell views the current price movement as a healthy consolidation after a robust rally in 2025.

• He anticipates the overarching trend for gold to remain higher, supported by ongoing fundamental drivers like central bank purchases and geopolitical uncertainty, albeit at a more moderate pace.
• Prudent investment strategies suggested include steady accumulation or buying on dips, considering inflationary pressures and evolving monetary policies.

Potential Risks for Gold

Maxwell outlined key risks for gold in 2026:

• A stronger US dollar or higher real interest rates could diminish investor interest.
• High US inflation or strong labor data might lead the Federal Reserve to delay rate reductions, pressuring gold prices.
• A decline in geopolitical tensions or an appreciation of the Indian rupee could also reduce momentum.

Impact

• Gold prices significantly influence investor portfolios in India, serving as a hedge against inflation and currency depreciation. Fluctuations affect household savings and purchasing power. Global economic indicators, the US dollar, and the Indian rupee's exchange rate are closely watched by businesses and consumers alike.
• Impact Rating: 7/10

Difficult Terms Explained

• Bullion: Gold or silver in bar or ingot form.
• Intraday volatility: Price swings occurring within a single trading day.
• US Federal Reserve: The central bank of the United States.
• ADP Non-Farm Employment Change: A report on US private sector job creation.
• Dollar Index: A measure of the US dollar's strength against major currencies.
• Geopolitical tensions: International disputes and political instability.
• Safe-haven asset: An investment expected to retain value during economic downturns.
• Real interest rates: Interest rate adjusted for inflation.
• Policy uncertainty: Lack of clarity on future government or central bank policies.
• US-China trade frictions: Trade disputes between the US and China.
• Indian rupee: The official currency of India.
• Consolidation: A period of stable price movement within a trading range.
• Monetary policies: Actions by a central bank to manage money supply and credit.
• Buying on dips: Investing after a price fall, expecting recovery.