Silver prices in India rose on Friday, March 27, supported by a weaker dollar and renewed bargain buying amid persistent geopolitical concerns. Gold also moved higher, tracking gains across the broader precious metals complex.
On MCX, silver price jumps 2.3% to its day’s high of ₹2,25,014 per kg while MCX gold rate advanced 1% to its intra-day high of ₹1,40,900 per 10 grams.
In the international markets as well, Spot silver climbed 1.1% to $68.80 per ounce, while spot gold rose 1.1% to $4,428.30 per ounce as of 0228 GMT. However, despite the day’s gains, gold has declined about 1.3% so far this week, reflecting underlying pressure on bullion prices. U.S. gold futures for April delivery also advanced 1.1% to $4,423.40.
Other precious metals also saw strong moves, with platinum rising 2.1% to $1,865.13 and palladium gaining 2.7% to $1,389.80, indicating broader strength in the metals segment.
What’s driving the prices
The rebound in silver and gold was largely driven by a softer U.S. dollar, which made dollar-denominated commodities more affordable for holders of other currencies, thereby boosting demand. Bargain hunting after recent declines also contributed to the uptick in prices.
Meanwhile, geopolitical developments continue to influence sentiment. U.S. President Donald Trump indicated that a pause on strikes against Iran’s energy infrastructure would be extended into April and described ongoing talks as progressing well. However, an Iranian official rejected the U.S. proposal to end the conflict, calling it “one-sided and unfair,” highlighting the uncertainty surrounding any potential resolution.
However, the broader trend remains under pressure due to rising energy prices and inflation concerns. Brent crude continued to trade above $105 per barrel, as the ongoing conflict has severely disrupted shipments through the Strait of Hormuz, a key route that handles nearly one-fifth of global crude oil and LNG flows.
Elevated oil prices are expected to push up transportation and manufacturing costs, thereby intensifying inflationary pressures globally. While gold is traditionally seen as a hedge against inflation, the current environment presents a challenge, as higher inflation is also leading to expectations of tighter monetary policy and elevated interest rates.
Higher interest rates typically reduce the appeal of non-yielding assets like gold and silver, limiting their upside even during periods of economic uncertainty. This dynamic has been a key factor behind the recent weakness in bullion prices despite ongoing geopolitical tensions.
Silver, Gold Outlook Ahead
As gold and silver prices continue to correct from recent highs, many investors are left wondering whether the downtrend will persist or if a rebound is around the corner. The recent volatility in bullion markets has raised concerns, especially after sharp swings driven by global macro factors and geopolitical developments.
However, there are signs that the worst may be behind us. A recent report by SBI Research points to the possibility of a “smart recovery” in both gold and silver prices once geopolitical tensions ease and markets stabilise. This suggests that the current weakness could be more of a temporary phase rather than a long-term trend reversal.
At the same time, market experts are highlighting how recent movements in bullion prices have been closely tied to shifts in the dollar, crude oil and inflation expectations.
Hareesh V, Head of Commodity Research at Geojit Investments Limited, explained the recent bounce in precious metals:
“Gold’s nearly 4% surge on MCX and silver’s sharp rebound were driven by a softer US dollar and easing inflation concerns as crude oil prices corrected. The pullback in energy markets helped temper expectations of higher global interest rates, offering additional support to precious metals. Meanwhile, reports suggesting the US is exploring ways to conclude the conflict with Iran boosted safe-haven demand, amplifying the upside momentum in bullion today.”
According to him, the recent upside in gold prices is also linked to value buying after the sharp correction seen earlier. Investors appear to be stepping in at lower levels, which has helped support prices in the short term.
“Gold’s upside today seems driven by value buying after recent sharp corrections, with attractive entry levels triggering renewed demand alongside short covering that lifted prices further,” Hareesh V noted.
That said, the near-term outlook remains cautious despite the potential for a recovery. While geopolitical developments and easing inflation pressures could continue to support bullion, strong headwinds still remain.
“Gold and silver may see a mild near-term recovery, but breaking recent highs looks difficult. While supportive geopolitics could underpin sentiment, a firm US dollar is likely to cap strong upside, keeping price movements relatively restrained for now,” he added.
In essence, while the current dip in gold and silver prices may appear concerning at first glance, underlying factors suggest that a gradual recovery could be on the horizon. For investors, this phase could present selective opportunities—but with the caveat that volatility is likely to remain a key feature in the near term.
Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before making any investment decisions.
