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Gold Prices Surge Amid Safe Haven Demand & Fed Uncertainty

Gold prices increased by 0.23% over the week, driven by safe haven demand and a lack of clear signals from the US Federal Reserve. Silver futures saw a more significant jump of 4.41% on Friday. The removal of additional margins by domestic exchanges like MCX and NSE spurred higher speculative trading activity. Analysts point to structural deficits and geopolitical tensions supporting a bullish outlook, with some forecasting a multi-year bull run for precious metals.

Key Points: Gold, Silver Prices Rise on Safe Haven Demand & Fed Outlook

  • Gold up 0.23% weekly
  • Silver futures surge 4.41%
  • MCX, NSE remove additional margins
  • Rs 1,55,000 key resistance for gold
  • Analysts forecast 3-5 year bull run
2 min read

Gold surges 0.23 pc during week due to rising safe haven demand

Gold prices rose 0.23% this week as safe haven demand grew. Silver futures jumped over 4%. Analysts see a 3-5 year bull run for precious metals.

"persistent geo-political tensions are likely to keep risk-averse flows elevated, causing a rally in gold and silver - Analysts"

Mumbai, Feb 21

Gold prices surged 0.23 per cent during the week, amid renewed buying interest due to global macro-economic factors, safe haven demand and lack of directional cues from the US Federal Reserve.

On Friday, MCX gold February futures surged 0.07 per cent while MCX silver March futures added 4.41 per cent. Currently gold futures stand at Rs 1,56,993, while silver futures at Rs 2,52,042 per kg.

The price of 10 grams of 24-carat gold was at Rs 1,54,080 on Friday down from Rs 1,54,483 seen on Monday, according to data published by the India Bullion and Jewellers Association (IBJA).

The removal of additional margins in futures markets in domestic exchanges spurred higher speculative participation in the market and increased intraday activity, pushing prices higher.

The MCX and the NSE have withdrawn the additional margin of 3 per cent levied in Gold Futures and 7 per cent levied in Silver Futures in all contracts of all variants with effect from Thursday.

Analysts said that the commodities entered the week in a phase of controlled consolidation following sharp directional moves across energy and metals. Structurally, metals continue to trade within rising channel frameworks, and market internals indicate absorption at higher levels in metals, they said, adding that the broader medium-term structure remains constructive.

Resistance is now firmly placed near Rs 1,55,000 levels and Rs 1,52,000- Rs 1,53,000 zone has transitioned into a short-term demand zone following repeated absorption, an analyst said.

Analysts said that structural supply deficits and industrial demand from green energy, EVs, AI and electronics for silver continue to underpin its bullish bias, also noting relentless gold accumulation by the central bank.

Analysts said the volatility in silver stems from a demand‑supply mismatch and profit‑booking after steep gains over the past year, even as gold remains elevated compared with recent weeks.

A stronger dollar and constant change in interest-rate expectations from the US Federal Reserve may act as headwind to precious metals, persistent geo-political tensions are likely to keep risk-averse flows elevated, causing a rally in gold and silver prices in the coming days, they forecasted.

A recent report noted that gold and silver have entered a 3-5 year bull run, supported by favourable macroeconomic conditions and structural demand trends.

- IANS

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Reader Comments

R
Rohit P
Silver up 4.41% in a week is huge! The article mentions demand from EVs and electronics. Makes sense with India's push for manufacturing. Might be a good time to look at silver ETFs for the long term, alongside the traditional gold.
D
David E
Interesting analysis. The removal of additional margins by MCX/NSE is a significant move that directly increased liquidity and speculation. While the long-term bull run thesis is strong, retail investors should be cautious of short-term volatility, especially in silver. Don't get carried away by weekly surges.
A
Aditya G
₹1.55 lakh for 10 grams! I remember when it was half this price. It's becoming harder for the middle class to buy even a small coin for festivals. The "safe haven" demand is real, but at what cost to regular savings?
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Sarah B
The link between geopolitical tensions and gold prices is clear. As long as there's instability in the world, gold will shine. The 3-5 year bull run forecast seems plausible. Diversifying a portfolio with some gold exposure seems like a prudent strategy.
K
Karthik V
While the article is informative, it feels very focused on traders and futures. For most Indians, gold is bought physically for weddings or as gifts. The physical market sentiment (like in Tanishq or local jewellers) often differs from the futures market. Would be good to get that perspective too.

We welcome thoughtful discussions from our readers. Please keep comments respectful and on-topic.

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