Gold and silver prices witnessed sharp volatility on Tuesday as domestic futures on the Multi Commodity Exchange (MCX) surged, while global prices retreated from recent highs. MCX gold rate climbed above ₹1.60 lakh per 10 grams, reflecting strong domestic demand and currency movements, even as international spot prices slipped amid a stronger US dollar and easing geopolitical concerns.
In the global market, spot gold fell 1.5% to $5,150.38 per ounce after touching a more than three-week high earlier in the session. US gold futures for April delivery were down 1.1% at $5,170.70 per ounce. The decline came as the US dollar strengthened, making dollar-denominated bullion more expensive for holders of other currencies.
Silver prices were under sharper pressure. Spot silver plunged 3.1% to $85.50 per ounce after hitting a two-week high on Monday. However, silver prices on MCX remained relatively flat compared to gold, supported by strong industrial demand cues from Asia.
Shanghai Silver Trades at Premium
The reopening of Chinese markets after the Lunar New Year holiday added a new dynamic to the precious metals trade. Silver prices on the Shanghai exchange are currently quoting around $94.38 per ounce — over $7 higher than the COMEX silver rate. This significant premium reflects tight local supply conditions and strong industrial demand, particularly from China’s manufacturing and renewable energy sectors.
The premium indicates robust domestic consumption in China, which is a major global consumer of silver. Traders believe that sustained buying interest from Chinese investors and industries could offer support to international silver prices despite near-term volatility.
Dollar Strength Weighs on Gold
The US dollar index gained strength after recent economic data and cautious investor positioning. A stronger greenback typically weighs on gold, as it increases the cost for foreign buyers. Market participants are also closely monitoring developments in US-Iran peace talks and global trade tensions.
Investor sentiment remains cautious after US President Donald Trump warned countries against stepping back from trade agreements recently negotiated with the US. His remarks followed a Supreme Court ruling that struck down emergency tariffs, creating uncertainty around trade policy.
Geopolitical developments continue to influence safe-haven demand for gold. While easing tensions in West Asia may limit aggressive buying, persistent global trade uncertainty keeps bullion attractive for portfolio diversification.
How to Trade Gold and Silver Now?
Analysts suggest that traders should remain cautious amid high volatility. For MCX gold, immediate resistance is seen near ₹1.62 lakh, while support lies around ₹1.57 lakh levels. A sustained move above resistance could trigger fresh buying momentum.
In silver, traders are watching the Shanghai premium closely. If the premium sustains above $7 per ounce, it may signal strong physical demand support. However, short-term traders should monitor dollar movement and global risk sentiment before taking aggressive positions.
Experts recommend adopting a buy-on-dips strategy in gold, given ongoing macro uncertainties. For silver, range-bound trading with strict stop-loss levels may be prudent due to higher volatility.
Overall, while global prices face short-term pressure, strong Asian demand and geopolitical risks may continue to underpin the precious metals market in the coming sessions.
