Gold Prices Experience Modest Recovery, Silver Surges Amid Market Volatility

Market Update: Gold and Silver Prices Rebound on De-escalation Hopes

March 24, 2023

Key Takeaways:

• MCX gold futures rose 0.29% to Rs 1,39,670 per 10 grams, rebounding from an early dip near Rs 1,36,500.
• Silver gained 0.46% to Rs 2,26,196 per kg, recovering from a low of Rs 2,18,108.

Read also: Gold and Silver Prices Decline Amid Strengthening Dollar and Inflation Concerns

Market sentiment improved following US President Donald Trump's announcement to pause planned strikes against Iran, fueling hopes of a potential de-escalation. However, the upside remains capped as the broader macro environment is still not supportive. Elevated crude prices and uncertainty around the interest rate trajectory keep gold sentiment fragile.

Market Analysis:

• Gold is holding strong support near Rs 1.35 lakh, while resistance is placed around Rs 1.42 lakh.
• Silver price action is expected to remain highly sensitive to geopolitical headlines, with volatility likely to persist as markets react to any further developments in the ongoing conflict.

Expert Insights:

Read also: Gold and Silver Prices in India: A Review of Current Rates Across Major Cities

• Sushil Kedia, founder of Kedianomics, believes that a weakening dollar index could provide the rationale for a strong rally in gold. He estimates that the dollar index may slide 10% and break below 90, leading to a massive rally in indices and assets.
• Kedia also predicts that silver may go up to 50% from Rs 2 lakh on MCX to Rs 3 lakh, and gold may surge about 30%.

Currency Update:

• The rupee traded weakly near 93.90 against the dollar, down 0.36% from the previous session.
• Currency analysts estimate that the rupee may trade in a weak range of 93.25 to 94.25, with downside likely to persist until there is clear progress in the Iran peace talks.