Gold prices in India traded nearly flat on Wednesday, posting marginal gains across purity levels, even as global bullion prices declined on profit-booking ahead of key US economic data. The domestic market showed resilience despite international headwinds as traders shifted focus from geopolitical tensions to upcoming US labor market indicators.

Indian Domestic Price Movement

Domestic gold prices demonstrated stability with minimal upward movement across all purity levels. The marginal gains reflect steady local demand despite global price pressures.

Silver prices edged higher in the domestic market, continuing their positive momentum. Silver gained ₹0.10 to ₹253.10 per gram, while prices on a kilogram basis rose by ₹100 to ₹2.53 lakh, maintaining the white metal's strong performance trajectory.

Global Market Dynamics and Profit-Booking

International gold prices slipped as investors booked profits after a recent rise, with spot gold falling 0.7% to $4,466.19 per ounce. US gold futures for February delivery declined 0.4% to $4,477.30 an ounce, retreating from earlier climbs to more than one-week highs.

The dollar traded near a two-week high, pressuring dollar-denominated commodities ahead of a series of US labor market indicators, including non-farm payrolls, JOLTS and ADP private payrolls data. This currency strength continues to create headwinds for precious metals in international markets.

Market Outlook and Technical Levels

According to Rahul Kalantri, Vice President – Commodities at Mehta Equities Ltd, gold and silver had recently advanced on strong safe-haven demand amid heightened geopolitical tensions, with markets now awaiting US payroll data for further direction. The focus has clearly shifted from geopolitical developments to economic fundamentals that could influence Federal Reserve policy decisions.

Investors continue to factor in expectations of at least two US rate cuts this year, maintaining the fundamental support for precious metals despite current volatility. The three successive rate cuts implemented previously served as a significant tailwind for precious metals, which benefit from lower interest rate environments due to their non-yielding nature.

Federal Reserve Policy Impact

The monetary policy backdrop continues to influence precious metals trading, with market participants weighing the implications of potential rate cuts on commodity valuations. Recent manufacturing data came in weaker than expected, reinforcing expectations for potential interest rate cuts and supporting the fundamental case for gold and silver investments despite current price volatility.

Silver has maintained its outperformance relative to gold, with the white metal continuing to benefit from multiple supportive factors including supply constraints and strong retail investor appetite, particularly from Asian markets. The current price action reflects ongoing institutional and retail interest in precious metals as portfolio diversification tools.

Morgan Stanley has issued an optimistic forecast for gold, predicting the precious metal will reach $4,800 per ounce by the fourth quarter of 2026. The investment bank's projection comes after gold delivered exceptional performance in 2025, recording its best annual gains in decades.

Gold's Record-Breaking Performance

Gold demonstrated remarkable strength throughout 2025, achieving several significant milestones that underscore its appeal as a safe-haven asset.

The precious metal's 64% gain in 2025 represented its strongest annual performance since 1979, highlighting the metal's renewed appeal among investors seeking portfolio diversification and protection against economic uncertainty.

Key Drivers Behind the Forecast

Morgan Stanley's bullish outlook stems from multiple fundamental factors that are expected to support gold prices through 2026. In a note dated January 5, the bank identified falling interest rates as a primary catalyst, along with anticipated changes in Federal Reserve leadership. The combination of these monetary policy shifts creates a favorable environment for non-yielding assets like gold.

Central bank purchases and institutional fund buying represent additional pillars supporting the bank's forecast. These large-scale buyers have consistently demonstrated appetite for gold as a strategic reserve asset, providing sustained demand that helps underpin price stability and growth.

Silver Delivers Exceptional Returns

Silver significantly outperformed gold in 2025, delivering extraordinary gains that reflected both industrial demand and investment interest.

Morgan Stanley noted that 2025 marked peak deficit conditions for silver, with China's new export licence requirements adding upside risk to prices. The structural market deficit, combined with rising industrial applications and investor demand, contributed to silver's remarkable 147% surge.

Base Metals Outlook

The investment bank expressed particular optimism for aluminum and copper, citing supply constraints and growing demand fundamentals. Aluminum supply remains constrained everywhere except Indonesia, while rising Midwest Premium suggests returning U.S. buying interest.

Copper markets face continued tightness, with U.S. imports rising and supply disruptions from 2025 extending into 2026. The benchmark three-month copper on the London Metal Exchange reached $13,387.50 on Tuesday, reflecting these supply-demand dynamics.

Nickel also gained attention, rising 5.8% to $17,980 per ton on Tuesday and hitting its highest level since October 8, 2024. The bank attributed nickel's strength to supply disruption risks in Indonesia, though noted much of this risk may already be reflected in current pricing.