Gold, silver prices may cool off

Precious metals ended 2025 on a strong note with gold and silver reaching fresh life-time highs in the last week of December. Prices cooled off a bit in the last couple of trading sessions of 2025 but gold and silver posted handsome gains for the year. The interest rate cuts announced by the U.S. Federal Reserve along with the weakening of the U.S. Dollar and uncertainty surrounding U.S. tariffs were the key catalysts for the spike in gold prices in 2025.

Comex gold surged past the psychological $4,500-mark last month but closed a tad lower at $4,332.1 by end December. This represents a gain of 1.78%. The price action in Comex silver was more impressive with the white metal notching up a 24.34% gain last month to settle at a fresh lifetime high of $70.98.

Mirroring global market trend, MCX Gold price gained 4.5% to settle at ₹1,35,580 per 10-gm. MCX silver recorded a whopping 34.55% gain last month to settle at ₹2,35,920/kg.

As observed last month, Comex gold resumed uptrend and went way past the then-mentioned target zone of $4,450-$4,500. The recent spike in price resulted in an overbought scenario, warranting a mean reversion move or a cool off. Comex gold price is likely to either remain range bound or drift lower to immediate support at $4,150-$4,200 zone. The long-term trend is positive and gold price could resume uptrend once the anticipated consolidation or pullback phase is over. Comex Silver price too behaved in sync with last month’s expectations and the price breezed past the target zone of $60-$62 mentioned last month. Like gold, silver price too is likely to remain subdued, trying to digest the recent gains. A drift lower to the immediate support zone of $65-$67 appears likely, before the resumption of the long-term uptrend.

In the domestic market, the depreciation of the Indian Rupee versus the U.S. Dollar resulted in a slightly exaggerated gains compared with Comex price levels. MCX gold price moved to the target zone of ₹1,38,000-₹1,40,000 range.

The recent price action suggests gold price could cool off in the near term and a fall to ₹1,28,000-₹1,30,000 seems likely . MCX silver, too, achieved the target price of ₹1,82,000-₹1,83,000 mentioned last month. Silver price in the domestic market could ease to ₹2,17,000-₹2,19,000 zone in the near term. The long-term uptrend is expected to resume on completion of the expected cool off phase.

Conclusion

To summarise, both gold and silver are in an overbought zone, warranting a cool off in the near term.

The long-term trend however remains positive.

(The author is a Chennai based analyst/trader. The views and opinion featured in this column is based on the analysis of short-term price movement in gold and silver futures at COMEX & Multi Commodity Exchange of India. This is not meant to be a trading or investment advice.)