Excerpts:
Gold and Silver Surge to Record Highs: Reasons behind the surge
Naveen Mathur, Director – Commodities & Currencies at Anand Rathi, highlighted that gold and silver recently hit record highs, with gold reaching around $2,790 per ounce globally and ₹80,000 in India during late October. Silver also crossed ₹1 lakh per kg domestically. Key drivers included expectations of Federal Reserve rate cuts, geopolitical tensions, and central bank purchases boosting safe-haven demand.
However, recent dollar strength, rising to 106-107 from 104 levels, has pulled gold prices down to around $2,670. Factors like Middle East conflicts, Syria tensions, and discussions of 100% U.S. tariffs on BRICS countries continue to influence the price trends. Gold is now stabilizing between $2,600-$2,700 per ounce, while silver trades around $30-$32.
Impact of Geopolitics and China’s Policies
Geopolitical tensions, including conflicts in the Middle East and developments in Syria, have buoyed safe-haven demand for gold and silver. In Asia, China’s pro-growth monetary policy has provided further support for industrial metals like silver. “China’s appetite for industrial metals significantly impacts global markets, and their central bank’s bullion purchases have added to the upward trend,” Mathur noted.Click to watch the full interview here.
South Korea’s Political Crisis and Its Impact
Discussing South Korea’s ongoing political crisis, Mathur noted that while it has had some impact on safe-haven assets, its influence is less pronounced compared to the Middle East and Russia-Ukraine conflicts. “The Middle East tensions have had a far greater impact on gold and silver prices than the developments in South Korea,” he remarked.
The Dollar Index and Commodities
The dollar index recently touched a high of 108.07, fueled by expectations of U.S. growth and Federal Reserve policies. This has exerted pressure on emerging market currencies, including the rupee, which has depreciated to record lows of ₹84-85 against the dollar. Mathur pointed out that foreign institutional investor (FII) outflows and weaker-than-expected GDP growth in India have further contributed to the rupee’s decline.
Potential Impact of Trump’s Tariff Policies
Discussing former U.S. President Donald Trump’s proposed 100% tariffs on BRICS countries, Mathur highlighted potential inflationary consequences. “If imposed, these tariffs would increase commodity import costs, impacting both economic growth and currency values. This would be positive for the dollar but challenging for relative currencies and commodity markets,” he said.
Key Levels to Watch for Gold, Silver, Crude, and Copper
Mathur provided crucial market levels for various commodities:
- Gold (MCX February contract): Support at ₹77,000 and ₹76,100; resistance at ₹78,800 and ₹79,500.
- Silver: Support at ₹93,500 and ₹95,100; resistance at ₹98,000 and ₹1,00,000 per kg.
- Crude (MCX December contract): Support at ₹5,600 and ₹5,450; resistance at ₹5,950 and ₹6,150 per barrel.
- Copper: Support at ₹810 and ₹800; resistance at ₹840 and ₹860.
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