Gold and silver prices are poised for a potential significant upmove, with a senior analyst predicting domestic gold could target levels between Rs 138,000 and Rs 140,000 per 10 grams given the right market triggers. This outlook comes after both precious metals staged a strong rebound last week, continuing a record-breaking rally throughout 2025.
Record Rally and Market Drivers
The precious metals complex has been the standout performer this year. Silver has skyrocketed by over 120% Year-to-Date (YTD) in 2025, while gold has gained more than 65%, firmly establishing them among the best-performing assets. On the domestic front, silver decisively broke the psychological barrier of ₹2 lakh, consistently marking fresh all-time highs. Internationally, gold hovered around the $4400 per ounce mark on the COMEX.
According to Manav Modi, Senior Analyst of Commodity Research at Motilal Oswal Financial Services Ltd, this rally has been supported by a combination of macroeconomic factors. Softer US Treasury yields and a weaker US Dollar Index, lingering near the 98 level, have provided a strong foundation. Volatility in the USD/INR pair, which saw a drop of nearly Rs 2 last week amid RBI intervention, further supported domestic prices in India.
Policy Uncertainty and Economic Data
The monetary policy landscape remains a key focus for investors. The US Federal Reserve's 25 basis points rate cut in its December meeting, delivered with a divided vote, has reinforced expectations of ongoing policy uncertainty. Mixed views from officials on the future interest rate path have added to the market's cautious stance.
Recent economic data from the United States has also kept pressure on the dollar and yields. Rising unemployment figures, weaker-than-expected payroll additions for October and November, and mixed retail sales data have painted a picture of a slowing economy, enhancing the appeal of non-yielding assets like gold.
Furthermore, silver backwardation has widened again, a market condition signaling immediate supply tightness and strong speculative interest. While global safe-haven demand remains intact due to geopolitical risks, gold demand in India has faced mild headwinds from record-high prices, even during the ongoing wedding season.
Outlook and Key Levels to Watch
Markets are now awaiting key triggers for the next directional move. Upcoming US data on housing, GDP, the PCE price index, consumer confidence, and durable goods orders will be closely monitored. Trading activity may also be influenced by holiday-thinned volumes as the Christmas period approaches.
Manav Modi's stance for investors is to "Buy on Dips." He identifies a crucial support level for gold at Rs 132,000. If this support holds, prices could rally towards the target zone of Rs 138,000 to Rs 140,000. However, a decisive break below the Rs 132,000 support could see prices correct towards Rs 130,000.
(Disclaimer: The recommendations and views expressed are the expert's own and do not represent the views of The Times of India.)
