Gold Remains Lacklustre, But Silver Shines Brighter Amid Russia-Ukraine Jitters

Gold rate: The yellow metal is witnessing a steady rise in price levels. However, silver's trajectory is turning out to be more attractive for commodity investors. In the global market, silver prices reached a 7-month high earlier this week.

While gold is currently caught between rising demand driven by uncertainty and profit-booking pressures, analysts believe that the commodity might have entered a consolidation phase.

On the MCX, silver prices have rallied from lows of Rs. 96,742 per kg on May 30 to highs of Rs 1,01,350 per kg as of June 3, a rally of around 5% on the MCX futures. "Continued escalation of war between Russia-Ukraine will lead to further rally in Silver in the near term and MCX futures might soon move higher towards Rs.1,06,000/kg mark. Traders are advised caution as volatility will be key going forward," said Prathamesh Mallya, DVP- research, non-agri commodities and currencies, Angel One.

Despite earlier signs of easing tensions between Russia and Ukraine, recent developments point to an escalation in the conflict. This is eventually weighing down the overall investor sentiment. Last week, Ukraine carried out a drone strike operation in Russia, targeting five air bases.

"Gold and Silver prices rose toward $3,370 and $34.50 respectively, as escalating geopolitical and economic risks enhanced its safe-haven status. The OECD downgrading global growth forecast and weak US factory orders highlighted economic pressures, while resilient US labor data offered some support," said Rahul Kalantri, VP- commodities, Mehta Equities Ltd.

Key Levels to Watch

While the yellow metal's trajectory might not impress investors much, the recent rise in silver's price could shift attention away from gold. However, analysts continue to raise banners of caution, as any new developments on the tariff front might trigger increased volatility.

"In Rupee terms, gold has support at ₹96,420-96,000 while resistance is at ₹97,150-97,440. Silver has support at ₹100,460-99,550 while resistance is at ₹1,01,950-1,02,750," Kalantri said.