The precious metal space is seeing some green after significant volatility seen over the last few days.
Gold stable
Gold Spot prices are stable in early Asian trade. The Comex Gold rate is hovering well above the $5,000/oz mark. On MCX, Gold Futures closed at 0.17% lower at Rs 1.56 lakh per 10 grams for contracts of April expiry.
The bullion traders are watching out for key data from the US. Jateen Trivedi, VP Research Analyst – Commodity and Currency, LKP Securities, “Participants are awaiting key U.S. retail sales data, followed by unemployment and non-farm payroll numbers later in the week. These releases are likely to inject volatility, as they will shape expectations around the Fed’s policy stance and influence near-term price direction in bullion.”
However, a softer economic outlook has strengthened optimism about a potential rate cut by the Fed.
The geopolitical situation has also impacted sentiment for bullion traders. Gold is often referred to as a safe-haven asset. During phases of increased global tension, investors often increase bets on gold.
Silver upbeat
Silver is significantly more upbeat than gold in early Asian trade.Comex Silver spot prices are up nearly 2%, close to the $82/Troy ounce level. On MCX, Silver Futures for March delivery closed at 0.10% lower at Rs 2.52 lakh per 10 kilograms.
Silver climbed more than 1.5% toward $82.4/oz , recovering losses from the previous session as disappointing US economic data and deteriorating confidence in US assets boosted safe-haven demand. US retail sales data released Tuesday showed activity unexpectedly stalled in December, highlighting pressure on consumer spending.
Speaking on the outlook for the silver, Jigar Trivedi, Senior Research Analyst at Indusind Securities, said, “Safe-haven demand has been fueled by a rotation away from dollar-denominated amid growing concerns over policy uncertainties in Washington. However, investors remain cautious about potential volatility in the metals market following recent swings, including a speculative rally and historic sell-off in the past two weeks. MCX Silver March may appreciate to Rs 2,65,000/kg as the undertone is positive in the international market.”
Gold and ETFs see steady demand in January
Also, Gold and Silver ETFs hit record levels in January. These numbers highlight the continued interest in Gold and Silver ETFs, despite the recent price volatility.
Akhil Chaturvedi, Executive Director and Chief Business Officer, Motilal Oswal, highlighted that “Highlight with no surprise have been flows in Gold and Silver ETFs and Index Funds with record flows of Rs 24,000 crore. Investors have diversified their incremental flows from equities into precious metals, given the return profile over recent times.”