Gold and silver prices registered gains on Friday, January 9, as investors turned to precious metals amid ongoing geopolitical uncertainty. The upward movement in both metals reflects increased safe-haven demand from market participants seeking protection against global uncertainties.

Market Performance

Both gold and silver experienced positive price action during the trading session, with the precious metals benefiting from their traditional role as hedge assets. The price increases came as investors demonstrated preference for safe-haven investments in response to prevailing geopolitical tensions.

Safe-Haven Demand Drivers

The rise in precious metal prices was primarily attributed to heightened safe-haven demand. Geopolitical uncertainty continued to influence investor sentiment, leading to increased allocation toward gold and silver as protective assets. This trend underscores the enduring appeal of precious metals during periods of market uncertainty and global tensions.

Market Outlook

The precious metals market continues to respond to geopolitical developments, with both gold and silver maintaining their appeal as safe-haven assets. The current price movement reflects ongoing investor concerns about global stability and the continued relevance of precious metals in portfolio diversification strategies.

Gold and silver futures opened marginally higher on Friday, providing some relief to investors after a week marked by significant volatility. The precious metals showed resilience despite ongoing pressure from a stronger US dollar and market uncertainties surrounding key economic data releases.

MCX Trading Performance

Domestic futures markets reflected cautious optimism in early trading. The performance of key contracts showed mixed but generally positive momentum:

This modest recovery came after both metals closed lower in the previous session, with gold February futures settling at ₹1,37,742 per 10 grams (down 0.19%) and silver March futures dropping 2.91% to ₹2,43,324 per kilogram on Thursday.

Global Market Dynamics

International precious metals markets displayed mixed signals during early Asian trading. Spot gold declined 0.4% to $4,458.10 per ounce by 0126 GMT, while US gold futures for February delivery edged up 0.2% to $4,467.60 per ounce. The contrasting movements highlighted the ongoing uncertainty in global markets.

The US dollar index (DXY) strengthened by 0.1% to hover around 98.95, limiting bullion's appeal for foreign currency holders. This dollar strength continued to weigh on precious metals pricing, as stronger greenback typically reduces demand for dollar-denominated commodities.

Market Volatility Factors

Several factors contributed to the recent volatility in precious metals markets. The annual rebalancing of Bloomberg's commodity index created additional selling pressure across the sector. More significantly, market sentiment was affected by proposed US tariffs of 500% on BRICS nations for importing Russian crude oil, which triggered panic selling across global financial markets.

Investor attention remained focused on the upcoming release of US non-farm payrolls data, which could significantly influence the metals' near-term trajectory. This employment data serves as a key indicator for Federal Reserve policy decisions and economic health.

Technical Analysis and Trading Strategy

According to Manoj Kumar Jain of Prithvifinmart Commodity Research, price volatility in bullion remains elevated, but key technical levels provide guidance for traders:

Jain advised traders to wait for price stability before initiating fresh positions, emphasizing that long-term fundamentals for bullion remain intact despite near-term volatility.

Physical Gold Prices Across Major Cities

Physical gold markets across India showed varying price levels for both 22-carat and 24-carat gold:

Long-term Market Support

Despite short-term volatility, fundamental support for precious metals remains strong. The Chinese central bank has added 42 metric tonnes of gold since November 2024, marking its 14th consecutive month as a net buyer. This sustained institutional demand reflects ongoing global uncertainty and de-dollarisation trends, providing underlying support for gold prices even amid market fluctuations.