Gold and silver prices have experienced sharp swings in recent days, tumbling on 30 January and 2 February after soaring to record highs over the past year.
Traditionally regarded as a safe store of value, these metals attract investors during periods of economic uncertainty and geopolitical tension. In India, cultural occasion’s further boost demand, with an estimated 4.6-4.8 million weddings expected during the peak season between late 2025 and early 2026.
Market volatility has been amplified by the return of Donald Trump, whose unconventional policies, including tariffs, pressure on the Federal Reserve, and remarks about Greenland, have unsettled investors and weakened the US dollar, increasing the appeal of “safe haven” assets.
Between Trump’s inauguration and January 2026, gold prices nearly doubled while silver surged almost fourfold. After a sharp correction, gold settled at ₹1.57 lakh (£1,271) per 10 grams on 3 February, while silver closed at ₹2.84 lakh (£2,300) per kg. The rebound came after intense profit-taking, during which silver had slumped nearly 36 per cent from its January 29 peak of ₹4.04 lakh (£3,272) per kg, and gold had dropped about 17 per cent from its record high of ₹1.83 lakh (£1,482) per 10 grams.
Analysts suggest the metals’ rally reflects a deeper global crisis of confidence after years of high inflation and rising national debts, with the US debt reaching $38 trillion. Central banks in emerging economies, including China and Turkiye, have also boosted purchases to reduce dependence on the dollar, supporting demand for gold and silver despite short-term volatility.
Last Friday, Trump announced Kevin Warsh as his pick to lead the Federal Reserve, a relatively conventional choice compared with others on his shortlist. Warsh, a former Fed governor, reassured investors concerned that Trump might choose an ally who would slash rates despite inflation risks, as he had been pressuring outgoing Fed chief Jerome Powell to cut rates. Trump also expressed hopes for a deal with Iran after weeks of military threats. Analysts suggest that expectations of greater economic stability and a stronger dollar prompted investors to sell off precious metals.
Recent reports indicate that gold and silver are facing near-term downward pressure due to margin hikes and market volatility, though analysts see much of the decline as a correction rather than a long-term shift in safe-haven demand or geopolitical drivers. JPMorgan expects central bank and investor demand to push gold to $6,300 per ounce by year-end, citing ongoing structural diversification and real-asset outperformance. Silver, trading around $80 an ounce since December, is harder to predict without central banks as steady buyers. JPMorgan expects silver to maintain a higher floor of $75-$80 per ounce, even after its recent catch-up gains to gold.
