After months of record-breaking returns, gold and silver suddenly tumbled in late January, surprising investors. Prices have yet to revisit their earlier highs, but momentum is gradually returning.
At 1:30 pm on February 20,Multi Commodity Exchange of India (MCX)gold was trading at Rs 1,55,809, up Rs 990 (0.67%), while MCX silver stood at Rs 2,45,277, higher by Rs 3,884 (1.61%). The rebound has sparked fresh interest among investors wondering whether the worst is over.
The primary driver behind the recovery appears to be rising geopolitical tensions, particularly between theUnited StatesandIran. Historically, precious metals gain when global uncertainty rises, as investors seek assets that preserve value during instability.
Hareesh V, Head of Commodity Research atGeojit Investments Limited, noted that safe-haven demand has strengthened amid tensions. While a stronger US dollar and shifting interest-rate expectations could limit sharp rallies, sustained uncertainty may continue to support bullion prices.
In simple terms, as long as geopolitical risks persist, gold and silver are likely to attract risk-averse capital.
Gold’s recent rebound follows one of its steepest short-term declines in recent memory. The recovery suggests bargain buying at lower levels, as investors step back into the market after the correction.
Aksha Kamboj, Vice President of theIndia Bullion and Jewellers Association (IBJA), said the rebound indicates that broader positive sentiment toward gold remains intact despite volatility. Markets are now reassessing global macro trends and interest-rate expectations, which may help gold stabilise in the near term.
Silver, known for sharper price swings than gold, also faced a heavy sell-off before bouncing back. The current recovery is supported by renewed investor interest and short covering.
However, silver remains more sensitive to market sentiment and global industrial demand. While gains may continue if global cues stay supportive, volatility is expected to remain elevated.
For long-term investors, gold continues to serve as a hedge against geopolitical and economic uncertainty. Maintaining balanced exposure to bullion can help reduce overall portfolio risk.
Those already invested may consider holding rather than reacting to short-term fluctuations. Fresh investors should avoid lump-sum entries and instead consider staggered buying during dips.
Short-term traders need to exercise caution. Both metals, especially silver, remain highly volatile. While quick gains are possible, sharp corrections can occur just as rapidly.
The recent rebound in gold and silver prices signals returning confidence, driven largely by global tensions and safe-haven demand. However, the path ahead may remain uneven. Investors should focus on strategy, risk management, and long-term allocation rather than reacting to short-term market noise.
