Gold rate outlook: Gold and silver prices set for volatile week; Festive demand and US inflation in focus
Gold and silver are poised for a volatile week ahead as investors navigate the interplay between domestic festive buying, physical market premiums, and crucial macroeconomic developments in the US, analysts said. With Federal Reserve officials, including Chair Jerome Powell, set to comment on policy on Tuesday, bullion markets are expected to closely track any cues on inflation, interest rates, and broader monetary policy, PTI reported. “In the next week, focus will be on the physical demand for bullion during the festive season in India along with global political and geo-political developments, particularly the passage of the US spending bill and efforts to resume diplomacy on ending the Russia-Ukraine war. These factors are likely to shape gold price trends in the coming months,” said Pranav Mer, Vice President, EBG – Commodity & Currency Research, JM Financial Services Ltd, PTI quoted.Mer noted that gold prices ended last week on a positive note, but volatility remained elevated, with sharp corrections followed by renewed buying at lower levels. “This was expected and will continue as the bulls and bears fight out at market tops,” he added.Concerns over US trade policies have also continued to influence investor sentiment. “There has not been much change on the fundamental side with uncertainty over US trade tariffs still being in place. President Donald Trump’s announcement to levy tariffs on China has again pushed up safe-haven demand,” Mer said.Last week, gold prices rallied by Rs 3,251, or 2.75 per cent, reaching a record Rs 1,23,677 per 10 grams on Thursday before retreating slightly toward the week’s close on the Multi-Commodity Exchange (MCX).“Gold prices have had an astonishing rally in recent months, with a year-to-date gain of more than 50 per cent in 2025. This prompted investors to take profits on Thursday, triggering a correction of more than Rs 3,000 from highs of Rs 1,23,677 per 10 grams, which contributed to extreme volatility in the yellow metal,” said Prathamesh Mallya, DVP-Research, Non-Agri Commodities and Currencies, Angel One.US monetary policy remains a key driver. Pankaj Singh, Founder & Principal Researcher of SmartWealth.ai, noted that minutes from the September Federal Open Market Committee meeting reinforced expectations of a prolonged inflationary bias and balance-sheet reduction, both supporting gold prices.On the international front, Comex gold futures for December delivery closed marginally higher at $4,000.4 per ounce after hitting $4,081 midweek. Spot gold similarly rose by 1.06 per cent to $4,018.30 per ounce before briefly touching $4,059.34 per ounce.“The week began with bullion extending gains on safe-haven flows as markets hedged against persistent US fiscal risks and speculation surrounding the Federal Reserve’s policy path. However, sentiment shifted midweek,” said Riya Singh, Research Analyst, Commodities and Currency, Emkay Global Financial Services.Despite short-term cooling, analysts remain constructive on the broader trajectory. “Gold is still on track for its eighth consecutive weekly advance, up nearly 14 per cent this quarter, reflecting sustained investor preference for tangible assets amid concerns over US debt exceeding $36 trillion, and rising inflation expectations despite slowing economic growth,” Singh added.Physical demand from Asia moderated last week, as high prices deterred fresh buying, particularly in China and India, where import premiums narrowed. Analysts said the short-term outlook will hinge on upcoming US inflation readings and Federal Reserve commentary.Silver continued its historic rally, albeit with elevated volatility. On the MCX, silver prices rose by Rs 722, or 0.49 per cent, last week, touching an all-time high of Rs 1,53,388 per kilogram on Thursday. Internationally, Comex silver futures for December delivery hit $49.96 per ounce, while spot silver briefly breached $51 per ounce before retreating to close at $50.29 per ounce.“Silver’s historic run reached a fever pitch last week, with spot prices climbing to $51.24 per ounce on Thursday, the highest level since 1980, before correcting to around $50 amid intense volatility and supply constraints,” said Riya Singh of Emkay Global Financial Services. She added that silver remains the standout performer of 2025, posting a remarkable 70 per cent year-to-date gain driven by industrial demand, speculative interest, and safe-haven flows.Severe tightness in the London bullion market also amplified price swings, with the implied one-month lease rate surging to 11 per cent, the highest since 2022, reflecting a scarcity of lendable silver. Aggressive shipments of bullion to the US amid tariff fears drained London inventories to multi-year lows, flipping usual premiums and discounts of up to $2.50 per ounce versus Comex futures in New York, Singh noted.“Sustained tightness in London and ongoing macro uncertainty could maintain upside momentum, though volatility will likely remain elevated as speculative long positions reach their most extended levels in years,” she said.Analysts advised investors to monitor domestic festive buying trends, international political developments, and US monetary policy announcements closely, as these factors are likely to continue shaping the short-term movements in gold and silver markets.
