Gold and silver prices influenced by US political shifts, says Moneycontrol
Investors should focus on long-term accumulation rather than speculation following recent volatility in precious metals.
According to Moneycontrol, gold and silver prices are being influenced by political changes in the US following midterm election results. International gold prices have moved above $4,100 per ounce, while MCX gold is trading above Rs 1.44 lakh per 10 grams.
The midterm elections saw Democrats gain control of both chambers of Congress, leading to a divided government for the rest of President Donald Trump’s term. This shift caused a softer dollar and lower Treasury yields, which generally supports gold and silver prices.
While the election outcome matters, other factors like inflation, bond yields, the dollar, and geopolitical developments will have a greater impact on prices. For Indian investors, the USD-INR exchange rate is also a significant factor because gold is priced in dollars.
Silver remains more volatile than gold due to its industrial applications. Investors are advised to use market corrections to build allocations gradually rather than chasing prices after rallies.
Gold can serve as a core exposure for portfolios, while silver may be used as a smaller allocation for those who can tolerate higher volatility. Softer crude oil prices could also support precious metals if they help ease inflation and allow for lower interest rates.
