The pullback follows sharp swings in international markets over the past fortnight, as traders respond to shifting expectations around US monetary policy and currency movements.
Interest-rate trajectory shapes sentimentA softer US inflation reading — with headline CPI rising 2.40% in January — has reinforced expectations that the US Federal Reserve could begin easing policy in 2026. Markets are currently factoring in two rate reductions next year, with some participants eyeing a potential move as early as mid-2026.
NS Ramaswamy, Head of Commodity & CRM at Ventura, said the broader disinflation trend and easing expectations keep the long-term view on gold constructive. He noted that the US Dollar Index has weakened below key psychological levels, and upcoming FOMC minutes and PMI data could determine its next directional move. A softer dollar typically enhances gold’s appeal.
He added that, structurally, gold retains the potential to move higher over the longer term if monetary easing materialises as anticipated.Silver in transition phase
Silver has corrected more sharply, reflecting its dual role as both a precious and industrial metal.
According to Ramaswamy, the current price structure indicates an accumulation phase, with the metal entering a critical time cycle toward late February and early March. A decisive move above $80 per ounce could signal the start of a broader expansion phase.
Seasonal patterns around the Lunar New Year period, which often see lighter participation, may also be contributing to near-term volatility, he said.
Aksha Kamboj, Vice President at the India Bullion & Jewellers Association (IBJA), said gold’s recent easing appears to be consolidation after earlier gains, while silver’s correction reflects heightened volatility rather than a structural reversal.
Outlook
Analysts said bullion prices will remain sensitive to incoming U.S. economic data, central bank commentary and currency trends. While short-term fluctuations may persist, expectations of policy easing and evolving global macro conditions are likely to guide the next phase of movement in gold and silver.
