Gold Under Pressure While Silver Gains Momentum; Check Key Levels to Watch

Gold vs Silver price: While gold’s record-breaking rally might have paused, the silver metal is gaining strong momentum. Last week, silver surged to a fresh all-time high of ₹1,06,000. Analysts expect this upward trend to continue, driven by heightened geopolitical tensions owing to the Russia-Ukraine conflict and concerns over macro stability in the US.

Meanwhile, the US Dollar Index slipped below the 99 mark ahead of the US-China meeting. With rising macro uncertainty investors are increasingly shifting their focus from gold to silver as their preferred safe-haven asset.

"The historically elevated gold-to-silver ratio, which measures how many ounces of silver are required to purchase one ounce of gold, also highlights silver’s relative undervaluation. Furthermore, a weakening U.S. dollar enhances the attractiveness of silver and other dollar-denominated commodities to international buyers, boosting demand significantly," said Tejas Shigrekar, chief technical research analyst- commodities and currencies at Angel One Ltd.

On June 9, the rate of 24-carat gold (per 10 grams) stood at ₹97,840 in the Delhi NCR region, as per GoodReturns. Silver metal's price stood at ₹1,08,000 (per kg) in the capital.

Silver's price level touched a 13-year high on Friday. Platinum followed suit and reached the highest price level since early 2022. Both metals are now catching up with gold's price trajectory. So far this year, silver and platinum have surged by 25% and 29%, respectively.

Key Levels to Watch

According to analysts, a weaker US dollar will make silver and other dollar-priced commodities more attractive for global investors, eventually lifting the overall demand levels. On top of this, silver's industrial usage will also impact the price levels positively.

"Silver is a key input into photovoltaic solar panels, while platinum is used in catalytic converters in combustion engines and laboratory equipment. Both markets are heading for a deficit this year, following several years in which demand outstripped supply. Inflows into silver-backed ETFs have continued to grow since early February, with holdings up 8%," Nirmal Bang said in its commodity report.

"We expect silver prices to find support in the range of ₹1,03,800- ₹1,03,300 levels. Trading consistently below ₹1,03,000 levels would lead towards strong support at ₹1,02,200 levels. Resistance is now observed in the range of ₹1,07,100- ₹1,07,600 levels. Trading consistently above ₹1,07,600 levels would lead towards the strong resistance at ₹1,08,700 levels," Shigrekar said.