Gold and silver prices opened weak on Wednesday as investors engaged in profit-booking following recent rallies that pushed precious metals to one-week highs. The decline affected both domestic and international markets, with geopolitical tensions continuing to provide underlying support for safe-haven assets.

MCX Trading Performance

Domestic precious metals showed notable declines on the Multi Commodity Exchange (MCX) as profit-taking dominated trading sentiment:

International Market Trends

Global precious metals markets mirrored the domestic weakness, with spot gold falling 0.60% to $4,469.04 per ounce after achieving nearly 3.00% gains in the previous session. The pullback came despite continued geopolitical tensions and market uncertainty that typically support bullion demand.

Investors are now focusing on upcoming US payroll data for insights into the Federal Reserve's interest rate trajectory, which could significantly impact non-yielding precious metals.

Physical Gold Rates Across Major Cities

Physical gold prices varied across major Indian cities, reflecting regional market dynamics:

Expert Trading Recommendations

Jateen Trivedi of LKP Securities provided guidance for gold trading amid current market conditions. He noted that risk sentiment continues to favor higher allocation towards gold due to renewed geopolitical tensions, including reports of US involvement with Venezuela and heightened global uncertainty.

Trivedi expects gold to remain volatile but with an upward bias, projecting a near-term trading range between Rs 1,37,000 and Rs 1,42,000. The expert emphasized that geopolitical developments, including asset freezes by Swiss authorities following recent Venezuelan developments, could deepen safe-haven flows into precious metals.

Market Outlook

The precious metals complex continues to navigate between profit-taking pressures and safe-haven demand driven by geopolitical tensions. While short-term volatility persists, underlying factors including global uncertainty and potential Federal Reserve policy changes maintain support for gold and silver as defensive assets in investor portfolios.

Gold and silver prices gained ground in volatile trading sessions as a combination of geopolitical risks, US monetary policy uncertainty, and market positioning dynamics supported demand for safe-haven assets. The precious metals rally comes despite recent profit-taking activities following record highs achieved in late December.

Geopolitical Tensions Drive Safe-Haven Demand

Geopolitical uncertainty emerged as the primary catalyst for precious metals strength following reports of US military action involving Venezuela's leadership. This development injected fresh risk premium into global markets, with investors particularly concerned about potential disruptions given Venezuela's strategic importance in the global oil supply chain. The heightened tensions encouraged market participants to increase their exposure to traditional safe-haven assets like gold and silver.

Federal Reserve Policy Expectations Shape Market Sentiment

US monetary policy outlook continues to influence bullion performance as markets await key economic indicators. Investors are closely monitoring upcoming data releases including manufacturing activity reports and labor market statistics, alongside commentary from Federal Reserve officials. These inputs are expected to provide crucial guidance on the interest rate trajectory, which remains a critical factor for non-yielding assets such as gold.

Trading Dynamics and Market Positioning

Market positioning and profit booking activities contributed to increased volatility in precious metals trading. After touching record highs in late December, gold prices experienced a correction as investors booked profits at elevated levels. Year-end holiday periods also resulted in thinner market liquidity, amplifying price movements in both directions.

On the Multi Commodity Exchange (MCX), gold futures retreated from all-time highs but maintained trading within a wide range, reflecting ongoing two-way interest from market participants. This trading pattern indicates continued uncertainty about near-term direction while underlying demand remains supportive.

Silver Experiences Amplified Volatility

Silver prices followed a similar upward trajectory to gold but exhibited sharper intraday swings due to additional technical factors. International silver markets faced particular pressure after margin requirements for futures trading were raised, forcing leveraged participants to reduce positions and triggering short-term selling pressure. This technical adjustment created temporary downward pressure despite the broader positive sentiment for precious metals.

Market Outlook and Support Levels

Despite recent pullbacks, analysts note that underlying support for precious metals remains intact. The combination of a softening US inflation backdrop and sustained investor caution continues to provide fundamental support for gold and silver prices. Gold has maintained its position above key psychological levels, indicating persistent demand amid ongoing macroeconomic and geopolitical uncertainty.

Analysts expect price volatility to remain elevated in the near term, with direction dependent on incoming US economic data, Federal Reserve policy tone, and the evolution of current geopolitical risks. While the broader outlook for precious metals remains constructive, intermittent corrections are anticipated in the current highly reactive market environment.