Gold slips on profit‑booking, silver extends rally on supply stress
What's the story
Gold prices fell today during Asian trade, with spot gold down 0.4%. The decline comes after recent volatility in the market as prices failed to hold above key resistance levels. Jateen Trivedi, VP Research Analyst at LKP Securities, attributed the dip to profit booking by traders following a recent rally in gold prices.
Market prediction
Gold's volatility and future trading range
Trivedi also said that gold is likely to remain volatile as markets reassess positions. Thin trading volumes during the US holiday period could keep price swings elevated, with gold expected to trade between ₹1.35 lakh and ₹1.42 lakh in the near term, he added. Despite the recent pullback, gold prices have surged over the year as investors flock to safe-haven assets amid geopolitical tensions, fears of US fiscal instability, and expectations of further interest rate cuts by the Federal Reserve.
Market performance
Silver prices continue to outperform amid supply constraints
In stark contrast to gold, silver prices have continued their impressive run. Spot silver rose 3% to $79.87 per ounce, extending a year-long rally that has seen prices hit record highs. The surge is attributed to prolonged physical supply deficits, declining inventories, policy-led supply constraints, and sustained industrial and investment demand.
Market shift
Silver market enters structural phase driven by inventory depletion
Navneet Damani, Head of Research at Motilal Oswal Financial Services, said the silver market has entered a structural phase driven by inventory depletion and physical scarcity. He highlighted a widening disconnect between paper pricing and physical availability, indicating deeper stress in global price discovery mechanisms. The report also noted sustained drawdowns in silver inventories across major hubs such as COMEX and Shanghai, highlighting a global shortage of deliverable metal.
Market influence
China's role and proposed export licensing requirements
China's position as a major refiner and net importer has also impacted the silver market, with physical inventories hitting decade-low levels this year. Proposed export licensing requirements from January 1, 2026 are likely to further tighten global supply. Manav Modi, Commodities Analyst at Motilal Oswal Financial Services, said persistent inventory declines and weakening arbitrage between Shanghai and COMEX have exposed limited availability of physical silver.