Gold and silver prices dip after record highs, but weekly gains likely: Should you invest now?
Gold and silver prices retreated slightly on Friday (September 27), after hitting record highs earlier this week. Despite the dip, both metals are set to post weekly gains, driven by safe-haven demand and anticipation of further US interest rate cuts.
As of 0404 GMT, spot gold traded at $2,673.21 per ounce, down from its previous session’s peak of $2,685.42, according to news agency Reuters.
US gold futures remained steady at $2,695.80.
Meanwhile, spot silver slipped 0.3% to $31.93 per ounce, after nearing a 12-year high of $32.71 the day before.
In India, the 24-carat gold rate was ₹75,660 per 10 grams on September 27.
Factors behind price movements
Gold prices remain supported by expectations of another US Federal Reserve interest rate cut, which is weakening the dollar.
Analysts, like Kyle Rodda of Capital.com, suggest that these cuts, combined with China’s recent economic stimulus measures, are providing a boost to the precious metals market.
Lower interest rates reduce the opportunity cost of holding non-yielding assets like gold and silver and increase their appeal as safe-haven investments.
Further fueling the rally are geopolitical tensions in the Middle East, with Israel’s bombing campaigns and Russia’s nuclear warnings adding to market uncertainty.
Silver prices also received a push from China’s fiscal stimulus aimed at stabilising its property sector.
This is expected to support industrial demand for the metal.
Outlook and investment insights
Despite the recent dip, analysts expect precious metals to maintain upward momentum.
BMI, in a research note, predicted that gold could see higher highs in the coming months, given ongoing global political and economic uncertainties.
Rahul Kalantri, VP Commodities at Mehta Equities Ltd, said that gold faces resistance at ₹75,690-75,880 per 10 grams, while support lies at ₹75,150-74,870 per 10 grams. For silver, resistance is at ₹92,990-93,680 per kg, with support at ₹91,450-90,750 per kg.
Investors should keep a close watch on US inflation data and potential geopolitical escalations.
Lower interest rates and ongoing global tensions make these metals a valuable part of a diversified investment portfolio.
–With Reuters inputs