Gold, silver prices off peaks as Trump softens tariff stance on Europe—Right time to buy? MOFSL's take

Gold and silver prices eased a bit on Thursday, January 22, after touching new record highs earlier in the week. The fall was largely driven by investors booking profits, especially as US President Donald Trump’s softer comments on tariffs reduced some of the immediate geopolitical worries around Europe.

The pullback comes after a strong and sustained rally, supported by safe-haven demand, limited global supply and steady industrial demand. With prices cooling off for now, many investors are asking a simple question: is this a short pause before the next move higher, or the start of a period of consolidation? As of 3:30 pm on January 22, MCX gold was trading at Rs 1,51,249 per 10 grams, while MCX silver stood at Rs 3,07,924 per kg, both easing from lifetime highs hit in the previous session.

MCX futures slip amid profit booking

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On the Multi Commodity Exchange of India, gold February futures slipped nearly 1 per cent as traders booked profits after a sharp upside move. Silver futures also edged lower, reflecting similar sentiment across precious metals.

Market participants said the correction appears technical rather than structural, with no major reversal signals so far. Open interest in gold futures declined to around 9,870 lots, indicating long unwinding rather than aggressive fresh short positions.

In overseas markets, gold futures on COMEX hovered in a consolidation band near $4,790–$4,800 per troy ounce, after hitting a record above $4,887 earlier in the week. Silver traded firm near $92–$93 per ounce, staying close to historic highs despite the mild correction. Analysts said the pause was expected after the rapid surge, especially as immediate geopolitical risk premiums eased.

Trump softens Europe tariff stance, dollar steadies

Sentiment improved after Trump indicated that the United States would not impose tariffs on European countries over the Greenland issue. Speaking on the sidelines of the World Economic Forum in Davos, Trump said force would not be used to acquire Greenland and that a framework for future engagement had been discussed.

This shift reduced fears of an imminent US-EU trade conflict, supporting risk appetite and stabilising the dollar. The dollar index rose to around 98.81, making gold marginally more expensive for overseas buyers and adding pressure to prices.

Industrial demand keeps silver in focus

Despite the day’s decline, silver continues to attract strong interest due to robust industrial demand. Analysts say silver continues to enjoy strong underlying support, driven by steady demand from sectors such as solar power, electric vehicles, artificial intelligence infrastructure and electronics. At the same time, tightening global supply is reinforcing the metal’s positive long-term outlook.

Motilal Oswal Financial Services notes that the recent dip is more about short-term volatility and profit booking after record highs, rather than any meaningful shift in the overall trend.

The brokerage noted that Trump’s moderation on Greenland and EU tariffs reduced immediate geopolitical risk premiums, while his broader pro-US growth narrative supported the dollar in the near term.

However, Motilal Oswal added that confidence in central bank independence, reinforced by recent developments in the US, remains structurally supportive for bullion. The brokerage expects the US Federal Reserve to keep interest rates unchanged at its January 27–28 meeting, with markets still pricing in rate cuts later in the year.

Investors are now tracking crucial macroeconomic cues, including US GDP data, inflation readings and the Personal Consumption Expenditures index, the Federal Reserve’s preferred inflation gauge.

Is this the right time to buy?

Market experts believe the bigger picture for gold and silver is still positive. Expectations of eventual US rate cuts, ongoing geopolitical tensions and steady industrial demand continue to support prices over the long term. That said, after such a sharp rise in a short period, some ups and downs in the near term are only natural, and investors should be prepared for bouts of volatility.