Understanding the Momentum Behind Gold and Silver’s Multi-Year Rally
Fed’s Impact Unleashes Bullion Surge:
The US Federal Reserve’s dovish signals triggered a wave of excitement among investors. On the domestic front, gold and silver prices on MCX witnessed a substantial jump on December 14, propelled by a 2.3% gain in gold and an impressive 5% surge in silver.
Dollar Dips, Treasury Yields Fall:
Post-announcement, the dollar index took a nosedive, slipping below 103. Simultaneously, the 10-year US Treasury yield fell below the crucial 4 percent mark. These movements set the stage for a potential gold rally.
Analyst Predictions Fuel Optimism:
Analysts are optimistic about gold’s trajectory. Bhavik Patel, the senior commodities analyst at Tradebulls Securities, expects gold to test fresh all-time highs in 2024. Traditionally, gold rallies when the US Federal Reserve eases its tightening cycle.
Silver’s Role and Technical Outlook:
While silver showcased a remarkable 5% intraday surge, Bhavik Patel emphasizes its underperformance over gold in the long run. Over half of silver’s global usage is industrial and tends to outperform gold during economic recoveries.
Jigar Trivedi, senior commodities analyst at Reliance Securities, provides a positive outlook on the technical front for gold. He foresees bullish undertones, with a possibility of a technical correction but an overall positive trajectory. Silver’s outlook remains bullish, with $26/ounce as a key resistance level.
Market Projections and Buying Recommendations:
Rahul Kalantri, VP of Commodities at Mehta Equities, anticipates robust momentum for gold and silver in the short term. The optimistic sentiment is echoed by Jigar Trivedi, who recommends buying on dips, affirming the bullish undertones in both precious metals.
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