Volatility grips gold, silver in 2026, amid Fed Reserve, US Dollar cues; what investors should note

Gold and silver prices have turned sharply volatile in 2026 after delivering an exceptional rally last year. Both precious metals have corrected steeply—down between 16% and as much as 43% from their respective peaks—prompting investors to reassess positions amid shifting macroeconomic signals. A firmer US dollar, resilient US economic data and recalibrated expectations around the Federal Reserve’s interest rate trajectory have emerged as key drivers behind the recent swings.

On Friday, domestic bullion prices rebounded in line with global cues. MCX gold for April delivery rose by Rs 1,662, or 1.09%, to trade at Rs 1,54,498 per 10 grams, while MCX silver for March surged Rs 6,065, or 2.57%, to Rs 2,42,500 per kg. Despite the bounce, prices remain range-bound. Gold on the MCX is currently consolidating between Rs 1,50,000 and Rs 1,58,000, while silver futures are oscillating within a wide Rs 2,35,000–Rs 2,70,000 band, reflecting heightened uncertainty and rapid position adjustments.

Internationally, the recent sell-off has been more pronounced. Gold prices fell sharply by $117 on Thursday, sliding 2.30% to $4,981 per ounce, while silver futures plunged nearly 9% to $76.53—one of the steepest single-day declines seen so far in 2026. The trigger was stronger-than-expected US jobs data, which significantly lowered the probability of near-term Federal Reserve rate cuts. At the same time, the US dollar index rebounded to around 97, making dollar-denominated commodities costlier for non-US buyers and adding further pressure on bullion prices.

In spot markets, gold is hovering near $5,040 per ounce, down about 0.88% on the day, while spot silver trades close to $82.90, lower by 1.49%. Silver has faced comparatively heavier selling as traders unwind leveraged positions following its spectacular 141% rally in 2025. This divergence has pushed the gold–silver ratio wider to nearly 61:1, indicating silver’s relative underperformance versus gold.

What analysts said

Even so, analysts largely view the correction as a healthy pause rather than a trend reversal. Aksha Kamboj, Vice President at the India Bullion & Jewellers Association (IBJA) and Executive Chairperson of Aspect Global Ventures, said gold is retreating from recent highs due to profit-taking, despite an overall positive sentiment. She noted that persistent global uncertainty and evolving policy trends continue to support the case for a prolonged bull run in gold, with long-term investors remaining constructive. On silver, Kamboj added that while prices are correcting after a strong rally, structural demand drivers suggest the metal’s broader upcycle remains intact.

From a technical perspective, Ponmudi R, CEO of Enrich Money, said MCX gold is consolidating in the short term but continues to hold above key long-term support zones. Strong buying interest is visible in the Rs 1,45,000–Rs 1,50,000 range, and a decisive move above Rs 1,60,800 could reopen the path toward Rs 1,65,000–Rs 1,75,000. Anuj Gupta, a SEBI-registered market expert, highlighted immediate support for COMEX gold between $4,940 and $4,910 per ounce, with resistance at $5,020–$5,070, while MCX gold faces support near Rs 1,49,000–Rs 1,50,500 and resistance at Rs 1,55,000–Rs 1,58,000.

Stay invested or sell off?

In its latest report, Emkay Wealth Management said gold and silver may be entering a multi-year structural bull phase, supported by favourable interest-rate trends, sustained central-bank buying, and rising industrial demand. In its latest Navigator report on precious metals, Emkay Wealth said the current rally in gold and silver is fundamentally driven rather than speculative, signalling a shift in global capital allocation patterns. Unlike earlier cycles dominated by short-term trading, the present uptrend reflects sustained asset allocation into precious metals as part of diversified portfolios.

The firm noted that heightened global uncertainty has altered investor behaviour, with gold and silver increasingly viewed as long-term portfolio components rather than tactical hedges. Central banks continue to add gold to their reserves, interest-rate cycles are turning supportive, and silver is benefiting from strong industrial demand, reinforcing the structural nature of the rally.

“The current rally in gold and silver is not being driven by speculation, but by a structural shift in how investors globally are allocating capital,” said Dr Joseph Thomas, Head of Research at Emkay Wealth Management. He added that while short-term volatility is inevitable, the medium- to long-term case for maintaining measured exposure to gold and silver remains strong.