Gold and Silver Prices Trade Narrowly Amidst US Federal Reserve Policy and Trade Talk Uncertainty

Gold and silver futures experienced fluctuations on Thursday, initially opening lower before recovering slightly to trade in a narrow range. Gold futures on the MCX opened 1.27% down at Rs 1,19,125 per 10 grams, while silver slipped 0.4% to Rs 1,45,498 per kg. By the close, gold settled marginally down by 0.15% at Rs 1,20,505 per 10 grams, whereas silver ended 0.54% higher at Rs 1,46,871 per kg.

Investor sentiment was shaped by the US Federal Reserve's decision to cut interest rates by 25 basis points to 4.0%. However, hawkish comments from the Fed Chairman regarding further easing led to some profit-taking. Concurrently, optimism surrounding the upcoming US-China trade discussions between Presidents Donald Trump and Xi Jinping reduced the safe-haven demand for gold.

Analysts like Rahul Kalantri from Mehta Equities Ltd. noted that despite short-term weakness, gold and silver are on track for a strong monthly and yearly performance. Kalantri provided key support levels at Rs 1,20,070–Rs 1,19,480 for gold and Rs 1,44,950–Rs 1,43,750 for silver, with resistance at Rs 1,21,450–Rs 1,22,100 for gold and Rs 1,47,240–Rs 1,48,180 for silver.

Jateen Trivedi of LKP Securities highlighted that the US Fed's rate cut was largely anticipated, failing to provide significant uplift. He also pointed to geopolitical tensions, including President Trump's remarks on nuclear weapons testing, as factors keeping risk elevated and supporting bullion sentiment.

Impact This news directly affects commodity prices, influencing investors and traders in the precious metals market. It can also indirectly impact sectors like jewellery and mining. The cautious tone from the US Federal Reserve and ongoing trade negotiations create uncertainty, leading to potential volatility. Rating: 6/10

Difficult Terms Hawkish comments: Comments made by central bank officials indicating a preference for tighter monetary policy, potentially involving interest rate hikes. Basis point: A unit of measure equal to 1/100th of a percentage point (0.01%). Easing: A monetary policy action by a central bank to reduce interest rates or increase the money supply to stimulate economic activity. Safe-haven demand: Increased buying of assets perceived as stable and secure during periods of economic or political uncertainty. Bullion: Precious metals, especially gold and silver, in bar or ingot form. Geopolitical tensions: Strained relations or conflicts between countries that can affect global markets. Range-bound: When an asset's price trades within a predictable, narrow band of highs and lows over a period.