Gold, Silver rebound after peace talks stall — Should you book profits or wait?

Gold and silver prices rebounded in domestic and international markets on Wednesday amid rising geopolitical tensions and safe-haven buying.

In the international market, gold April futures settled at $5,009.50 per troy ounce, up 2.11 per cent. Silver March futures ended at $77.598 per troy ounce, gaining 5.52 per cent.

In the domestic market, gold April futures settled at Rs 1,55,761 per 10 grams, up 2.87 per cent. Silver March futures ended at Rs 2,44,268 per kilogram, rising 6.77 per cent.

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Why Are Gold and Silver Prices Rising?

Prices recovered after two sessions of sharp decline. The earlier fall came following reports that talks between the US and Iran, and negotiations related to the Russia-Ukraine conflict, ended without any conclusion on Wednesday. The lack of progress in the discussions renewed geopolitical concerns and lifted demand for safe-haven assets.

Manoj Kumar Jain said, “Gold and silver prices recovered from lower levels after two sessions of steep sell-off as the US-Iran and Russia-Ukraine peace talks ended without any conclusion, increasing geopolitical risk once again.”

He said safe-haven buying returned in both precious metals following the developments. However, he cautioned that uncertainty over US Federal Reserve rate cuts may limit further gains.

Fed Rate Cut Uncertainty May Cap Gains

The minutes of the recent Federal Open Market Committee meeting showed that a majority of members supported holding rates due to concerns over tariff-driven inflation. Two members, however, favoured a quarter percentage point rate cut.

Jain said, “The US Fed rate cut uncertainty and strength in the dollar index could limit gains of gold and silver.”

He added that both metals are witnessing high price volatility. “We are experiencing very high price volatility in both precious metals,” he said.

Key Support and Resistance Levels for the International Market

According to Jain, silver prices could hold support at $63.90 per troy ounce, while gold may hold support at $4,770 per troy ounce on a closing basis this week.

He said gold has support at $4,964–4,915 per troy ounce and resistance at $5,055–5,122 per troy ounce in the current session. Silver has support at $74.40–72.00 per troy ounce and resistance at $80.00–82.40 per troy ounce.

What Should Investors Do?

On the Multi Commodity Exchange, gold has support at Rs 1,54,400–1,52,200 and resistance at Rs 1,56,800–1,59,100. Silver has support at Rs 2,38,000–2,32,800 and resistance at Rs 2,49,000–2,54,400, he said.

Jain said that volatility may continue this week amid fluctuations in the dollar index, ongoing US-Iran talks, geopolitical tensions and ahead of key US economic data.

“We expect gold and silver prices to remain volatile this week amid volatility in the dollar index, US-Iran talks, ahead of the key US economic data and geopolitical tensions,” he said.

He advised investors to remain cautious at higher levels. “We suggest booking profits in long positions at higher levels and avoid fresh buying until the opening of Chinese markets,” Jain added.

Analysts said that market participants will closely track further developments in global geopolitical negotiations and signals from the US Federal Reserve for direction in precious metal prices.