Could Gold and Silver Keep Rising on Fed Rate Cut Expectations?
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Synopsis
Gold and silver continue their upward momentum as prices rise, fueled by strong spot market demand and expectations of a potential interest rate cut by the US Federal Reserve. This article explores the latest market trends and geopolitical influences affecting precious metals.
Key Takeaways
- Gold and silver prices are on an upward trend, rising over half a percent.
- Strong demand and expectations of a Fed rate cut are supporting this growth.
- Current support and resistance levels for gold and silver have been established by analysts.
- Geopolitical tensions may influence the market dynamics.
- Investors should stay informed on US economic data and market conditions.
Mumbai, Nov 26 (NationPress) Gold and silver prices maintained their ascent on Wednesday, climbing by over half a per cent in early trading.
The increase followed a day where both metals surged by more than 1 per cent, bolstered by robust demand in the spot market and heightened anticipations of an interest rate reduction by the US Federal Reserve.
In early transactions, MCX gold December futures were up 0.50 per cent at Rs 1,25,835 per 10 grams.
Similarly, MCX silver December futures rose by 0.91 per cent, reaching Rs 1,57,750 per kg.
According to analysts, gold has support levels at Rs 1,24,350-1,23,580 and resistance at Rs 1,25,850-1,26,500. For silver, support is at Rs 1,54,850-1,53,600 and resistance is at Rs 1,57,110-1,58,000.
On the global stage, gold prices reached a near two-week peak as recent US economic data weakened the dollar, enhancing hopes for a Fed rate cut next month.
The dollar index fell to approximately 99.60, its lowest in a week, making gold more appealing to international investors.
Meanwhile, the benchmark 10-year US Treasury yield hovered near a one-month low established in the prior session.
Fresh economic indicators from the US contributed to the optimism. Retail sales for September grew by just 0.2 per cent, slower than the 0.6 per cent increase recorded in August.
The latest Producer Price Index (PPI) data also met expectations, showing a 0.3 per cent rise for the month.
Both reports were released on Tuesday after being delayed due to a record 43-day government shutdown that interrupted the publication of several critical economic indicators.
While the possibility of a Fed rate cut continues to prop up gold prices, geopolitical issues may hinder the metals' upward trajectory.
US President Donald Trump has initiated simultaneous missions to Moscow and Kyiv to advance a US-supported peace initiative, raising hopes for progress in resolving the Russia-Ukraine conflict.
If tensions decrease, the safe-haven demand for gold might diminish. Analysts suggest that gold and silver remain resilient as markets await additional clarity on US monetary policy and global geopolitical developments.
Point of View
It is crucial to remain neutral while reporting on market movements. The upward trend in gold and silver prices reflects broader economic conditions, influenced by both domestic and international factors. The market's reaction to Federal Reserve policies and geopolitical developments is essential to understanding future movements in these precious metals.
NationPress
26/11/2025
Frequently Asked Questions
What factors are influencing gold and silver prices?
Gold and silver prices are currently influenced by strong demand in the spot market and expectations of a potential interest rate cut by the US Federal Reserve.
What are the current support and resistance levels for gold and silver?
For gold, support is at Rs 1,24,350-1,23,580 and resistance is at Rs 1,25,850-1,26,500. For silver, support is at Rs 1,54,850-1,53,600 and resistance is at Rs 1,57,110-1,58,000.
How do geopolitical issues affect gold prices?
Geopolitical issues can impact safe-haven demand for gold; if tensions ease, demand may soften, affecting prices.
What recent economic data has affected the markets?
Recent US economic data, including retail sales and Producer Price Index, have contributed to market optimism, influencing gold and silver prices.
Should investors be concerned about current market trends?
Investors should closely monitor both economic indicators and geopolitical developments, as these factors can significantly impact precious metal prices.
