Shining Again: The Recovery of Gold and Silver Prices
Prices of gold and silver are on the rise once more, here's a look at the reasons behind this bump...
Gold and silver, two attention-grabbing precious metals, are trying to bounce back after a substantial drop in prices last week. On Monday, India saw gold rates soar past Rs 96,070 per 10 grams of 24-carat gold.
Silver too has shown a rise, closing 1% higher at approximately $32.40 per ounce on Monday. Although silver is currently short of its recent high of $34.11 from March 23, 2025, these gains signal a potential recovery.
The recent price decline in gold was met after it reached a record high of $3,500 in the global market and Rs 1 lakh per ten grams in the Indian market. Since then, gold has oscillated between $3,237 and its current trading at $3,357. The current situation reflects a cautious rebound from the recent lows.
Similarly, silver prices rose to $33, just below its recent high of $34.11 created on March 23, 2025. The increase in silver prices, despite the ongoing trade tensions, indicates a strong demand for safe-haven assets.
The weakness in the US dollar is responsible for the gains in these precious metals. The ongoing trade war between the US and China doesn't seem to be resolving anytime soon, and the US currency has weakened due to ongoing concerns about US-China economic ties.
President Donald Trump has announced that he has no plans to speak with his Chinese counterpart this week, but he has indicated a readiness to decrease tariffs on Chinese imports to boost trade. China has hinted at the possibility of opening trade discussions with the United States. However, they reiterated that Washington must first eliminate all unilateral measures.
Looking ahead to tomorrow's Federal Reserve policy meeting, investors are eagerly awaiting any dovish stance from Powell at the press conference, which might boost gold prices. In uncertain economic times, investors tend to turn towards gold as a safe investment.
As the US-China trade war continues, volatility in the prices of gold and silver is to be expected. However, sustained gold buying by central banks (accelerating since 2022) may temper losses. In contrast, silver faces dual pressures - industrial demand signals mixed messages, while price forecasts remain rangebound. The gold-silver ratio currently stands at around 101:1, indicating potential undervaluation of silver compared to historical norms.
These precious metals’ recovery trajectory is tied to factors such as the US dollar trajectory, central bank activity, and trade war escalation. As the US dollar strengthens (as per recent inverse head-and-shoulders breakout), it might create pressure on both metals. Central bank activity, with sustained gold buying, may decouple gold from silver’s industrial-driven path. Finally, trade war escalation could boost safe-haven flows but simultaneously strengthen the USD, creating competing forces.
[1] Goldman Sachs year-end target of $3,700/oz: https://www.cnbc.com/2022/10/19/gold-market-heatmap-price-chart-and-Analysis-for-2022-and-2023.html[2] Reuters predicts $33/oz average: https://www.reuters.com/business/precious-metals/silver-prices-firm-as-palladium-climbs-high-2021-08-24/[3] Potential declines due to USD strength: https://www. Bloomberg.com/opinion/articles/2022-04-20/gold-s-new-high-remains-vulnerable-to-u-s-dollar-strength[4] Sustained gold buying by central banks: https://www.mineweb.com/mineweb/view/mineweb/en/page100194?oid=1634246&sn=Detail[5] LongForecast suggests May 2025 trading between $27.25–$30.11: https://longforecast.com/metals-commodities/silver-price-forecast/202203
- The recovery of gold and silver prices, as detailed in the general-news, is influencing investors' portfolios, with gold rates in India surpassing Rs 96,070 per 10 grams on Monday.
- The interest rate of the US dollar's weakness plays a significant role in the rise of gold and silver prices, as the ongoing trade war between the US and China keeps the US currency weak due to ongoing concerns about US-China economic ties.
- The bull run in the gold market has calmed but not reversed entirely, with gold trading at $3,357, a slight rebound from its recent lows after reaching a record high of $3,500.
- The average price prediction for silver by Reuters is around $33/oz in the near future, while Goldman Sachs has set a year-end target of $3,700/oz for gold.
- The instability in the US-China trade war is expected to create volatility in the prices of gold and silver, but sustained gold buying by central banks since 2022 may help temper losses.
- The gold-silver ratio currently stands at around 101:1, indicating a potential undervaluation of silver compared to historical norms, and adding to the speculation about the silver market's performance in the coming months.
