Key Points:
- Gold and silver prices slipped as the dollar strengthened, with investors awaiting key U.S. jobs and inflation data to gauge interest rate cuts.
- Indian markets mirrored global cues, with gold steady in major cities and silver trading at ₹300 per gram, influenced by rupee-dollar movements.
- Analysts see moderate inflation and potential global rate cuts as supportive for precious metals long term, though short-term moves hinge on U.S. data.
Gold and silver prices slip on Tuesday in global and Indian markets as the dollar edges higher and investors await key U.S. jobs and inflation data to assess the path of interest rates after a volatile January rally.
Dollar Strength Pressures Precious Metals
Gold and silver prices slipped early Tuesday after two consecutive sessions of gains, reversing part of January’s sharp rally that pushed prices to record highs before a swift correction.
Spot gold fell one percent to $5,016.56 per ounce by 0055 GMT. The metal gained two percent on Monday as the dollar weakened to a more than one-week low. Gold reached an all-time high of $5,594.82 per ounce on Jan. 29 before selling pressure emerged.
Silver also declines alongside gold as the greenback firms modestly, making dollar-priced metals more expensive for overseas buyers.
“Markets are in a wait-and-watch mode ahead of major U.S. macro data later this week,” said Anil Deshpande, a Mumbai-based commodities analyst. “Any surprise in jobs or inflation could quickly shift expectations on rate cuts and move precious metals sharply in either direction.”
Precious metals had fallen from all-time highs at the end of January after a rally that many traders described as having surged “too far, too fast,” prompting profit-taking across bullion markets.
Investors are focused on upcoming U.S. employment and inflation figures, which could offer clues on when the Federal Reserve may begin cutting interest rates. Lower rates typically support gold and silver by reducing the opportunity cost of holding non-yielding assets.
India Prices Steady in Key Cities
In domestic markets, silver trades at ₹300 per gram, or ₹3,00,000 per kilogram, in major cities including Delhi, Mumbai, and Hyderabad on Tuesday, according to market data.
Gold prices in Delhi on Monday stand at ₹15,806 per gram for twenty-four karat gold, ₹14,490 per gram for twenty-two karat gold, and ₹11,859 per gram for eighteen karat gold. Local prices reflect a combination of international trends, currency movement,s and domestic demand.
“Indian prices are largely mirroring global cues, but the rupee-dollar movement is also playing a role,” said Ramesh Patel, a bullion trader in Ahmedabad. “If the dollar strengthens further, we could see more downside in local gold and silver.”
Jewelry demand remains mixed as consumers assess whether prices have stabilized enough to justify fresh purchases. Traders say bargain buying often emerges after sharp pullbacks, but sustained buying depends on clearer signals from global markets.
Silver in India is used heavily in jewelry, coins, and industrial applications, including electronics and solar equipment. Analysts note that industrial demand has helped support silver even during periods of price volatility.
Investors Weigh Timing, Inflation Signals
Gold and silver prices slipped, continues to be viewed by many investors as a hedge against inflation and a portfolio diversifier, particularly during periods of economic uncertainty. Silver, while more volatile, is often seen as a lower-cost entry into precious metals.
India’s annual consumer inflation rate is likely to have risen for a third consecutive month to 2.4 percent in January, according to a poll of economists. The increase is attributed partly to rising food prices and higher gold and silver costs.
January marks the first month of a new inflation data series based on 2024 prices and the first time since August that inflation is expected to return to the Reserve Bank of India’s two percent to six percent target band.
“Moderate inflation and potential rate cuts globally are supportive for gold over the medium term,” said Meera Shah, head of research at a Mumbai-based investment advisory firm. “However, short-term moves will remain driven by U.S. data and currency fluctuations.”
Silver can be purchased in India through banks, jewelers, and online platforms. Banks typically charge higher rates due to purity checks and certification, while jewelers offer products across different weights.
Analysts advise investors to stagger purchases rather than attempt to time exact market bottoms, given ongoing volatility.
“Both metals still have a positive long-term story, but patience and disciplined buying are key,” Shah said.
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