Precious metals: 3 factors to shape the course of gold, silver prices

With the geopolitical premium fading, analysts believe the next trend will hinge on three factors: the US dollar and bond yields, geopolitical developments, and demand dynamics

Gold and silver have entered a crucial phase after a steep correction, plunging more than 10 per cent, and over 15 per cent, respectively, in March 2026, marking one of their sharpest monthly falls in over a decade and prompting investors to reassess the outlook for precious metals. The decline follows a strong rally that pushed prices to record highs, with Comex gold hitting an all-time high of $5,584.30 and Comex silver touching a lifetime peak of $119.510.

 

Comex gold has corrected 16 per cent from its January 2026 peak to $4,696, while Comex silver has fallen more sharply to $73.26, down nearly 39 per cent from recent highs. In Indian rupee terms, gold has declined 15.75 per cent from ₹1,79,000 per 10 gm to ₹1,50,800, while silver has dropped 39 per cent from ₹4,10,000 per kg to ₹2,49,900.

 

 

The correction has reversed a strong portion of earlier gains, as macroeconomic headwinds overshadowed the safe-haven rally triggered by the West Asia conflict. With the geopolitical premium fading, analysts say the next trend will hinge on three factors: the US dollar and bond yields, geopolitical developments, and demand dynamics.

Dollar, yields remain key overhang

A strong US dollar, and elevated bond yields have emerged as the biggest near-term headwinds for bullion, analysts said. Ross Maxwell, global strategy operations lead at VT Markets, expects continued volatility with a modest upward bias if macro conditions remain supportive.

 

“I expect gold and silver prices to remain volatile through the rest of the year, with a modest upward bias as long as macro conditions stay supportive. Gold may benefit from its safe-haven appeal if geopolitical tensions persist or growth slows, while silver could see mixed performance given its industrial role, especially if high energy prices weigh on global growth,” said Maxwell.

 

He added that interest rates, inflation expectations, central bank policies, dollar strength, and geopolitical uncertainty will remain key drivers. “Rate cuts would support precious metals by reducing the opportunity cost of holding non-yielding assets. Higher inflation or financial instability could boost demand, while a stronger dollar may cap gains,” he said.

 

Kaveri More, commodity analyst at Choice Broking, said dollar strength and elevated yields have kept bullion under pressure despite geopolitical risks. She added that rising oil prices have heightened inflation concerns, reducing expectations of monetary easing, while gold sales by financially stressed central banks have added supply pressure.  ALSO READ | Why are gold and silver prices not rising despite the West Asia war?

Geopolitics to drive near-term volatility

Geopolitical developments are likely to continue influencing short-term price movements, though not always in a linear manner.

 

Hareesh V, head of commodity research at Geojit Investments, said gold’s broader outlook remains positive, but near-term volatility could persist due to the strong dollar and rate concerns.

 

“When geopolitical tensions rise, gold may see a mild upward trend. This volatility is likely to persist,” he said. He added that during crises, investors and central banks may liquidate gold to raise cash. “This conversion to liquidity is a key reason for recent selling and may be temporary,” he noted, adding that a ceasefire could support prices alongside a weaker dollar.

 

Divya Mandaliya, commodity research analyst at Anand Rathi Share and Stock Brokers, said bullion is in a consolidation phase, with liquidity conditions driving near-term price action. “Going forward, direction will depend on geopolitical developments. De-escalation could weaken the dollar and ease liquidation pressures, supporting a rebound, while prolonged tensions may sustain volatility,” said Mandaliya.

Demand dynamics: Silver may lag

While gold continues to enjoy structural support, analysts note that silver may underperform due to its industrial linkages. Hareesh V cautioned that silver faces higher downside risk in the near term amid weaker global growth expectations. “Silver may decline further, possibly to $40–$45,” he said, though he remains constructive over a five- to six-year horizon.

 

Mandaliya, however, expects both metals to remain supported over the medium to long term. “Despite near-term headwinds, the outlook remains constructive, backed by central bank buying, elevated global debt, and de-dollarisation trends,” she said. She added that gold could test $5,500 to $6,000 by end-2026, with silver tracking gold but with higher volatility.

 

More said silver has underperformed gold due to its stronger link to industrial demand and global growth, and expects bullion to remain largely range-bound with a positive long-term bias.

Retail strategy: Stay systematic

Experts advise caution and discipline amid volatility. Maxwell said investors should maintain a balanced approach. “Gold and silver can aid diversification but should not dominate portfolios. Gradual accumulation can help manage volatility,” he said.

 

Hareesh V also recommended staggered buying. “There is no need to panic. Investors can buy in small quantities,” he said, adding that a weaker rupee and seasonal demand could support domestic prices.  ======================================================= 

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