• The dramatic rise in Fed rate cut probabilities is lifting gold prices, while silver is continuing to build on fresh all-time highs as investor demand exacerbates low physical supply.
  • SHFE Silver stocks slumped to a 10-year low 559 tons last week, a 61% contraction year-to-date. Approximately 644 tonnes of silver have been withdrawn since early October, when tightening liquidity in London prompted a short squeeze and established an arbitrage window that drove metal out of both COMEX and SHFE warehouses.
  • Meanwhile, the anticipation that the incoming Fed Chair is going to be more dovish than past ones is also helping gold and silver.

Technical Triggers   

  • Gold has started its upward journey again; next target is $4345 (~Rs 130,000) and $4400(~Rs 132,000) with strong support at $4170 (~Rs 125,000).
  • Silver had its biggest December returns in 1997 and 2020, with gains of roughly 17% over the month. This seasonal tailwind may intensify the present price trend for the December target of $60 (~Rs 180,000) and $62 (~Rs 186,000), with firm support at $53 (~Rs 161,000), assuming tight supply conditions continue.

Dr.Renisha Chainani, Head- Research, Augmont