With analysts projecting further upside of up to 4–5% from current levels, the rally appears far from over.
Investor interest in the yellow metal has intensified in recent weeks amid persistent concerns about the U.S. economy, which is showing signs of softening. Sluggish job creation, easing services activity, and elevated cost pressures are creating a complex backdrop for the U.S. Federal Reserve.
While the market is almost fully pricing in a rate cut at the upcoming FOMC meeting, ongoing political tensions within the Fed and speculation around leadership changes are further complicating the outlook.
These developments are creating fertile ground for volatility, making non-yielding assets like gold increasingly attractive.
Traders are also factoring in the potential re-introduction of Trump-era tariffs, which are contributing to the current bout of safe-haven buying.Although gold typically responds to monetary policy cues, tariff-related anxieties have emerged as an additional tailwind this time. The looming risk of trade frictions intensifying amid political noise is prompting both institutional and retail investors to raise their exposure to gold and silver.According to Manoj Kumar Jain of Prithvifinmart Commodity Research, “Gold is hitting new high in the domestic markets due to rupee weakness and higher US trade tariffs.”
He adds that on Comex, if prices close above $3,454 per troy ounce in the December contract, they could extend gains to $3,480–3,509 levels, with $3,389 acting as a major support. In the domestic market, “if prices cross and sustain above Rs 1,02,220, they could extend gains towards Rs 1,03,500–1,04,750,” with support seen at Rs 99,500.
Ajay Garg, CEO, SMC Global Securities, observes that “in the current economic environment, marked by mounting geopolitical tensions and ongoing tariff disputes, a widespread sense of instability has driven investors toward safe-haven assets.”
He notes that not only are expectations for a rate cut growing stronger, but institutional demand is also playing a key role in the rally. “Central banks are consistently adding to their gold reserves,” Garg says, while ETF flows are further fueling momentum.
Despite a strong 38% gain this year, he sees room for continued outperformance and advises a strategic allocation of 10–15% to precious metals for long-term investors.
Supporting this view, Dr. Renisha Chainani, Head of Research at Augmont, notes: “The outlook for gold and silver remains bullish in the near term, driven by escalating trade tensions, particularly the proposed U.S. tariffs, and global economic uncertainty.”
She adds that tariff-related concerns are “fueling fears of a slowdown, making gold and silver attractive hedges.”
Her advice to investors: “Hold or accumulate on dips, as macro triggers suggest potential for further upside in both metals by at least 4–5% more from here.”
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)
