Precious metals, gold and silver, concluded Friday's trading session with significant gains, buoyed by a weaker US dollar, receding inflation worries, and renewed investor interest. Analysts are largely bullish on the bullion market, with silver, in particular, being highlighted as a relatively more affordable option compared to gold.
Friday's Price Movements
MCX gold price saw an increase of ₹324, or 0.20%, closing at ₹1,59,320 per 10 grams. The yellow metal reached an intraday high of ₹1,59,741 during the session.
MCX silver price surged by ₹2,699, or 1.12%, to ₹2,43,350 per kg. The white metal demonstrated a strong rebound from its intraday low of ₹2,39,049, recovering ₹5,901, and touching an intraday high of ₹2,44,950.
Why Gold and Silver Prices Rose
According to Ajay Kedia, Director at Kedia Advisory, the recent uptick in precious metals prices is attributed to several key factors:
- Return of Buying Interest: After a period of decline, investors have re-entered the gold and silver markets.
- Easing Inflation Concerns: Lower crude oil prices have contributed to reduced fears of inflation, subsequently lowering expectations for further interest rate hikes by the US Federal Reserve.
- Weaker US Dollar: The US dollar's dip below the 99 level has made dollar-denominated precious metals more attractive to international buyers.
- Central Bank Purchases: Continued gold acquisitions by central banks globally provide consistent support to bullion prices.
- ETF Inflows: Increasing inflows into gold exchange-traded funds (ETFs) further bolster market demand.
Investors are now closely monitoring statements from US Federal Reserve Chair Kevin Warsh at the upcoming Jackson Hole Symposium for indications regarding the future trajectory of interest rates.
2026 Outlook for Gold and Silver
Monarch PMS has outlined its projections for precious metal prices by the end of 2026:
- Base-Case Scenario (55% probability): Gold prices are expected to range between $4,300-$4,700 per ounce, while silver could trade between $70-$85 per ounce.
- Bullish Scenario (25% probability): In a more optimistic outlook, gold could reach $5,000-$5,600 per ounce, and silver might climb to $95-$120 per ounce. This scenario assumes a weaker labor market leading to monetary easing, declining real yields, renewed institutional demand for precious metals, and increased physical silver tightness.
Silver's market fundamentals also suggest continued strength. The market is currently experiencing its sixth consecutive annual deficit, with 762 million ounces withdrawn from above-ground stocks since 2021, while mine supply has remained largely flat for a decade.
Gold-Silver Ratio and Technical Levels
The gold-silver ratio has recently risen to approximately 69x, up from a peak of 46x in January. Monarch PMS uses 60x as its benchmark, suggesting that silver is currently undervalued relative to gold after its recent performance.
For MCX gold, Kedia identifies support at ₹1,56,000 and resistance at ₹1,67,000. A sustained break above ₹1,67,000 could propel gold towards ₹1,72,000. For MCX silver, support is noted at ₹2,35,000, with resistance at ₹2,52,000.