Gold reclaims $5,200, silver nears $90 on safe-haven demand
What's the story
Gold and silver prices have seen a significant spike during Asian trading hours on Wednesday. Spot gold rose by 0.48% to $5,202 per ounce, while spot silver climbed nearly 0.96% to $88.25 per ounce. The rise comes after both precious metals ended their four-day winning streak on Tuesday with losses of up to 1.6%.
Market impact
US interest rates may stay unchanged for some time
The US Federal Reserve is likely to keep interest rates steady "for some time," as recent economic data suggests an improving labor market in the country. This was stated by Susan Collins, President of the Federal Reserve Bank of Boston. However, minutes from the Fed's January policy meeting showed officials were wary of moving forward with rate cuts, which could affect precious metals prices.
Global influence
Trump warns countries against backing out from trade agreements
Analysts believe that ongoing uncertainty over US tariffs and rising tensions in the Middle East will keep safe-haven assets in focus. Donald Trump on Monday warned countries against backing out from recently signed trade agreements, saying they could face much higher tariffs under different trade laws. In another development, FedEx has sued for a full refund after the US Supreme Court struck down Trump's emergency tariffs.
Price forecast
Gold to remain well supported in long term
Brokerage firm Motilal Oswal has predicted that gold will remain well supported in the long term due to reserve diversification, limited supply growth, and persistent global uncertainty. "The long-term outlook for gold remains positive. As global reserves gradually diversify away from dollar-centric assets and physical supply remains constrained, gold prices are likely to stay supported around and above $5,000 per ounce," said Navneet Damani of Motilal Oswal Financial Services.
Market trends
Broader uptrend for gold prices remains intact
Ponmudi R, CEO of Enrich Money, said the broader uptrend for gold prices remains intact with sideways movement as a healthy pause after earlier volatility and profit-booking. He noted that "COMEX Gold is trading in the $5,100-$5,300 zone following consolidation in recent sessions." Strong buying interest is visible in the $4,850-$5,000 support band with a sustained breakout above $5,500-$5,600 could open the path toward fresh record highs.
Price recovery
Positive outlook for silver prices on higher timeframes
Ponmudi also highlighted a positive outlook for silver prices on higher timeframes. "COMEX Silver is trading near $85-$90 after correcting from record highs above $121," he said. Strong buying interest is evident in the $70-$75 support zone with a sustained recovery above $92-$96 could reignite momentum toward $100-$105 and potentially retest previous highs.