Gold, Silver prices rebound after US inflation cools — Should you buy on dips or stay cautious?

Precious metals rebounded sharply on Friday after softer US inflation data and weakness in the dollar index supported prices amid continued volatility in global financial markets.

In the international markets, gold April futures settled at USD 5,046.30 per troy ounce, up 1.98 per cent. Silver March futures settled at USD 77.964 per troy ounce, gaining 3.02 per cent.

In the domestic market, the gold April futures contract settled at Rs 1,55,895 per 10 grams, up 2.00 per cent. Silver March futures contract ended at Rs 2,44,360 per kilogram, rising 3.35 per cent.

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High volatility after inflation data

Commodities expert Manoj Kumar Jain said gold and silver prices rebounded strongly after recent losses. “Gold and silver show very high price volatility and rebound again after cooling-off US inflation,” he said.

He said prices had declined earlier in the week after reports suggested that the United States and Russia could consider trade settlements. However, he noted that the news was not confirmed by either side, leading to uncertainty in the markets.

The US inflation rate for January cooled to 2.4 per cent on a year-over-year basis, down from 2.7 per cent in the previous month. Jain said the softer inflation data weighed on the dollar index and US 10-year bond yields, which slipped from their highs and supported precious metals.

Global cues keep markets volatile

He said global financial markets are witnessing high volatility due to AI-related shocks and a sell-off in global equity markets. “We are experiencing very high price volatility in both precious metals,” Jain said.

He said silver prices could hold their support level of USD 65 per troy ounce and gold prices could also hold their support level of USD 4,770 per troy ounce on a closing basis this week.

Jain said gold and silver are likely to remain volatile in the near term amid fluctuations in the dollar index, developments in US-Iran talks and ongoing geopolitical tensions.

International market levels

For the international market, he said gold has support at USD 5,010-4,970 per troy ounce and resistance at USD 5,080-5,122 per troy ounce in the current session. Silver has support at USD 74.40-72.00 and resistance at USD 80.00-82.40 per troy ounce.

MCX outlook and trading strategy

On the Multi Commodity Exchange, gold is having support at Rs 1,54,400-1,53,150 and resistance at Rs 1,56,800-1,58,200, he said. Silver is having support at Rs 2,38,800-2,32,000 and resistance at Rs 2,49,100-2,55,000.

“We suggest buying gold on dips around 1,54,000-1,53,300 range with a stop loss below 1,52,000 for the target of 1,56,600-1,57,500,” Jain said.

He advised caution in silver trading due to sharp price swings. “We also advise avoiding trade in silver due to very high volatility,” he said. Jain said investors should remain cautious as global cues continue to drive sharp intraday movements in both metals.