Gold, Silver Brace For Swings Next Week On US Data, Venezuela Turmoil: Analysts
Gold and silver prices are expected to witness sharp swings next week as traders evaluate key US economic data and geopolitical developments. Gold futures declined 2.94% to ₹1,35,761 per 10 grams while silver dropped 1.45% to ₹2,36,316 per kg on MCX during the past week. International markets showed similar volatility with Comex gold falling 4.9% and silver declining 8%. Analysts cite upcoming US data releases and Federal Reserve commentary as key factors, while geopolitical tensions following developments in Venezuela add uncertainty to commodity markets.
*this image is generated using AI for illustrative purposes only.
Gold and silver prices are poised for significant volatility in the coming week as traders navigate key US economic data releases and assess heightened geopolitical tensions following recent developments in Venezuela. Analysts expect sharp price swings as markets weigh multiple factors influencing precious metals trading.
Recent Price Performance Shows Correction After Record Highs
Both precious metals experienced notable declines during the past week after achieving record levels in late December. The following table summarizes the recent performance:
| Metal: | Price Change | Percentage Decline | Current Level |
|---|---|---|---|
| Gold (MCX): | ₹4,112 decline | 2.94% | ₹1,35,761 per 10 grams |
| Silver (MCX): | ₹3,471 decline | 1.45% | ₹2,36,316 per kg |
| Comex Gold: | $223.10 decline | 4.90% | $4,329.60 per ounce |
| Comex Silver: | $6.18 decline | 8.00% | $71.01 per ounce |
Gold had surged to a record high of ₹1,40,444 per 10 grams before retreating more than 3% to settle at ₹1,35,761 per 10 grams on Friday. Silver touched a record of ₹2,54,174 per kilogram before tumbling ₹17,858, or 7.02%, during the week. In international markets, silver had reached a new record of $82.67 per ounce before declining 14.10%, or $11.65.
Market Factors Driving Volatility
Prathamesh Mallya, DVP - Research, Non-Agri Commodities and Currencies at Angel One, explained that gold prices are likely to remain volatile as both bullish and bearish factors are at play. The recent correction stemmed from profit booking at higher levels and low liquidity due to year-end and Christmas holidays. Gold prices have traded in the range of ₹1,34,000-1,40,000 per 10 grams over the past week amid volatile trading conditions and heavy selling pressure.
Pankaj Singh, smallcase manager and founder and Principal Researcher at Smart wealth AI, noted that gold's resilience near the $4,300-per-ounce mark reflects heightened investor caution amid a softening US inflation backdrop and persistent safe-haven demand. Silver prices witnessed a short-term correction after CME Group hiked the margin requirement for futures trade in gold, forcing a reduction in leveraged positions and triggering tactical selling across Comex.
Key Data Points and Geopolitical Developments
Investors will focus on several critical US economic indicators in the coming week:
- ISM Manufacturing data
- December ADP employment numbers
- Unemployment rate figures
- Comments from Federal Reserve officials regarding monetary policy outlook
Commodities markets are expected to see aggressive trading on Monday, reflecting volatile geopolitics after US forces captured Venezuelan President Nicolas Maduro and his wife in a military operation on Saturday, accusing them of drug trafficking. This development could impact global markets, potentially pushing bullion and crude oil prices higher on fears of supply disruptions from Venezuela, which holds the world's largest proven oil reserves.
Outlook and Risk Assessment
Singh provided a comprehensive outlook for precious metals, noting that as markets enter the new year, core drivers including flight to safety, monetary uncertainty, geopolitical risk, and policy-driven capital reallocation remain firmly in place. He projected that gold prices could climb between 10% and 60%, though interim corrections of up to 20% are likely in a volatile environment.
For silver, Singh identified a 5-30% downside risk while noting that accelerating industrial demand introduces significant upside potential, with prices potentially spiking up to 40% from current levels if supply tightness persists. He characterized the current environment as a "structurally bullish, policy-driven precious metals cycle" that may continue, while acknowledging the risk of significant corrections.
Investors will closely monitor the interplay between US economic data and the Federal Reserve's tone, while rising geopolitical risks could keep volatility elevated in the near term.
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