Gold and Silver outlook: Holiday-thinned trade may trigger price dip; analysts warn of volatile week
Financial analysts hinted at possible slowdown in gold and silver prices during the week while investors await crucial US economic data. Market activity is expected to be light due to the upcoming Christmas and New Year holidays, with key indicators like GDP, housing data, and consumer confidence figures affecting precious metal prices.Trading volumes are likely to decrease during the Christmas week, with many traders taking an extended weekend starting Wednesday. However, Pranav Mer from JM Financial Services warned that despite lower participation, market volatility could increase. “Moving into the Christmas week, traders expect some consolidation/correction in the markets as volumes are expected to remain low with major trader’s staying away due to long-weekend starting late on Wednesday. However, volatility/price swing may be higher due to low participation,” he said, as quoted by PTI.Gold has shown remarkable rally recently. MCX gold futures rose by Rs 574 (0.43%) last week, reaching an all-time high of Rs 1,35,590 per 10 grams on Thursday. This marked the fourth straight weekly gain and puts gold on track for its twelfth consecutive monthly increase.“The weak dollar, dovish federal reserve, lower inflation data in the US triggered the momentum in gold prices in the recent week,” said Angel One’s Prathamesh Mallya. Although gold has had a significant surge, silver has been the star, outshining the yellow metal with 8.08% gain last week. It touched a record high of Rs 2,08,603 per kilogram on Friday. The white metal has surged over 130% this year, driven by strong ETF flows and concerns about yen carry trades following the Bank of Japan’s expected rate hike.Looking ahead, experts remain positive about both metals but caution against immediate price corrections. Pranav Mer predicted that silver could test Rs 2,25,000-2,45,000 per kilogram “Silver remains positive, but risk reward remains unfavourable. In the near-term prices may test Rs 2,25,000-2,45,000 per kilogram. On the technical front… we continue to maintain positive view in gold and expect prices to rise further to Rs 1,40,000-1,45,000 by early next year, with support for reversal placed at Rs 1,29,000 per 10 grams,” he said.This bullish trend in precious metals isn’t just a regular market cycle. According to Pankaj Singh of SmartWealth.AI, similar price patterns have only occurred twice in the past fifty years, during periods of significant monetary and geopolitical stress.(Disclaimer: Recommendations and views on the asset classes given by experts are their own. These opinions do not represent the views of The Times of India)
