Silver reached $25 per ounce and gold was on track to reach a new high as the dollar index hit a 2-month low and US data sparked demand for safe-haven assets like precious metals. Silver futures for delivery in May ruled at $25.02 per ounce in early Wednesday trade, while gold futures for delivery in June jumped to $2,047.75 an ounce on COMEX. On March 7, 2022, the price of gold soared to a new high. A year ago, silver hit similar highs. Gold has increased by more than 10% since the beginning of the year, while silver has increased by 4.3%.
Gold June contract traded at a record high of 61,105 per 10 gm on Multi-Commodity Exchange. Silver’s May contract was set at 74,753 per kilogram. The spot price for 22-carat gold in Mumbai was set at 59,320/10 gm on Wednesday night. The weakening dollar index, according to Colin Shah, Managing Director of Kama Jewellery, was the main driver of the precious metals rally. The idea that the Fed may not only pause but also start lowering rates before the end of this year has caused the index to decline. Because they are safe havens, precious metals frequently draw investors’ attention during slow and uncertain economic periods, he added.
A decline in factory orders and a reduction in job opportunities, both of which are considered to be strong indicators of an oncoming slowdown in the U.S. economy, served as the catalyst for the current upswing. According to Shah, “These trends will limit the Fed’s ability to tighten rates and liquidity.” Gold will continue to be supported by persistent economic uncertainty, according to Hareesh V, Head of Commodities at Geojit Financial Services. “A weak U.S. dollar, choppy global markets, and strong physical demand from big consumers like China and India will allow the metal to move higher in the foreseeable future,” he said.
Gold is anticipated to move towards 61,460 and a break over that will take it to 61,890 levels, according to Prathamesh Mallya, AVP Research, Non-Agri Commodities, and Currencies at Angel One Ltd. The cup and handle pattern in prices is what Shah said was happening. We predict that domestic demand, driven by holiday celebrations and central bank purchases, will drive additional price increases for gold. A rush to safety among investors concerned about a recession has been sparked, according to research organizations like Fitch Solutions Country Risk and Industry Research, a Fitch Group business.
