Buying gold or silver? Motilal Oswal explains if bullion prices can hit fresh record highs

Gold and silver are back in focus as prices moved higher in early trade. By 6 pm, gold was trading at Rs 1,57,885, while silver climbed to Rs 2,58,200, with investors watching closely for signals on when the US Federal Reserve could start cutting interest rates.

Motilal Oswal Financial Services noted that gold and silver rallied early in the session as market participants reassessed the outlook for further rate cuts by the US Federal Reserve. While US job growth accelerated unexpectedly in January, the broader data still suggests the labour market may not be as strong as headline numbers indicate.

The unemployment rate fell to 4.3 per cent, offering the Fed room to keep interest rates unchanged for now. Revised payroll data also painted a weaker picture than first suggested. The US economy added just 181,000 jobs in 2025, much lower than the earlier estimate of 584,000, prompting fresh questions about how strong the labour market really is. That uncertainty has kept investors leaning towards safe-haven assets like gold and silver.

Even as bullion prices gained, US Treasury yields moved higher after the jobs report. The two-year bond yield rose to around 3.5 per cent, as markets began factoring in the possibility that the Fed may hold off on rate cuts for longer. The dollar, meanwhile, stayed firm, hovering near the 97 level, which capped some of the upside in precious metals. Motilal Oswal also noted that traders remain cautious about the reliability of the jobs numbers,

Any sustained strength in the dollar could cap gold and silver upside, while renewed weakness may push prices higher.

In its previous report, Motilal Oswal pointed out that gold and silver recovered after US retail sales growth stalled in December, suggesting consumer spending may be slowing.

Households scaled back purchases of motor vehicles and other big-ticket items, raising concerns that the US economy could enter a slower growth phase. Such signs of softening economic momentum strengthen the case for rate cuts later in the year, which typically benefits precious metals.

With speculative positioning largely washed out, traders are now waiting for the next major catalyst to drive another leg higher.

Apart from economic factors, global geopolitical developments continue to support bullion. Motilal Oswal flagged ongoing discussions involving the US, Iran and Israel as a key area to watch.

After talks with Israeli Prime Minister Benjamin Netanyahu, US President Donald Trump said there was no “definitive” agreement yet on Iran’s future course, though negotiations are expected to continue.

Any escalation in West Asia could increase safe-haven flows into gold and silver.

Motilal Oswal said the market’s immediate focus will shift to a series of high-impact data releases, including:

• UK GDP numbers
• US weekly jobless claims
• Domestic CPI readings later this week

Inflation data remains especially crucial, as it will shape expectations on whether the Fed can begin easing policy by mid-year.

Market expectations currently suggest rates could remain unchanged until Chair Jerome Powell’s term ends in May, with the possibility of a cut soon after in June.

With economic uncertainty, shifting rate expectations and geopolitical risks all in play, Motilal Oswal believes gold and silver could remain supported in the near term.