Gold prices are expected to remain firm in the coming week as traders track key global macroeconomic indicators, particularly US inflation data, for cues on the interest rate trajectory, while silver is likely to remain volatile amid shifting risk sentiment and speculative activity, analysts said.
Market participants will closely monitor US GDP, PMI, non-farm payroll and inflation readings. Inflation data from China, Germany and India will also be tracked, along with speeches by US Federal Reserve officials for signals on the timing of possible rate cuts and their impact on bullion prices.
"Gold consolidation and recovery suggest that bias still remains positive. However, in case of silver, we remain cautious of volatility and further corrections," Pranav Mer, Vice President, EBG - Commodity & Currency Research, JM Financial Services told PTI.
During the past week, gold futures rose Rs 7,698, or 5.2 per cent, while silver fell Rs 15,760, or nearly 6 per cent, on the Multi Commodity Exchange. The commodities market remained open on Sunday due to the presentation of the Union Budget by Finance Minister Nirmala Sitharaman.
"Gold and silver endured an extremely volatile week as a sharp dollar rebound, shifting Fed expectations and aggressive position unwinding triggered one of the steepest corrections in decades," Manav Modi, Analyst - Commodities, Motilal Oswal Financial Services Ltd (MOFSL), said.
He said easing tensions between Washington and Tehran, progress in tariff negotiations by President Donald Trump and reduced risk of a US government shutdown lowered safe-haven premiums, while Kevin Warsh’s nomination as the next Fed Chair also led traders to scale back aggressive rate-cut expectations.
"The unwind was severe: gold recorded its sharpest decline in nearly four decades, while silver languished, amplified by heavy call option positioning, margin calls and speculative driven liquidation," Modi noted.
Domestic markets also saw volatility. While the Union Budget largely met expectations with no sector-specific surprises, bullion remained volatile amid rupee swings. A softer USD/INR following progress on a potential trade deal between New Delhi and Washington weighed on local bullion prices.
Despite the sharp selloff, Modi said signs of stabilisation emerged as forced liquidation eased and value buying returned across both metals.
"A sharp rebound followed, aided by weaker economic data and value buying after a near 15 per cent correction in gold," he said, adding that domestic gains were further supported by a rebound in USD/INR from recent lows.
In global markets, gold rose $234.7, or nearly 5 per cent, over the past week on Comex, recovering to about $5,000 per ounce from a low of $4,400 per ounce.
"There has not been much change in the fundamentals, as geopolitical uncertainty still prevails. Central banks and ETFs investors continue to add gold to their holdings, while crypto firms have also increased buying to create & trade gold tokens, backed by physical assets," Mer said.
However, silver futures remained under pressure, slipping $1.63, or 2.08 per cent.
"Volatility grips silver as prices pass through a phase of high swings after the parabolic rally that ended on January 30 with a flash crash from an all-time high around $121 to a recent low of $64 per ounce," Mer added.
According to Modi, physical demand from China ahead of the Lunar New Year has remained resilient and could help absorb further selling.
"Broader fundamentals still support bullion through 2026, driven by central bank buying, fiscal concerns and geopolitical risks, though near-term volatility is likely to remain elevated," he said.
Analysts said macroeconomic data and remarks from Fed officials are expected to drive market direction next week, with traders anticipating continued volatility but also opportunities for short-term buying on dips, particularly in gold.
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