In a market gripped by geopolitical tension and heightened volatility, gold, traditionally the world's most reliable safe-haven asset, is showing an unusually muted response.
According to senior technical analyst Bhavik Patel, the metal is currently "under pressure", not because of a lack of global uncertainty, but due to the unexpected rise in the US dollar index and Treasury yields.
This shift, Patel explains, has temporarily sidelined gold's classical safe-haven appeal. "In gold, usually in war, it has a safe haven status. But this time… the dollar index and US Treasury are comparatively cheap, so a safe-haven asset is emerging more there," he said in his latest commodity outlook.
Patel highlighted that geopolitical conflicts typically buoy gold prices. Yet the current environment is behaving differently. He noted, "A safe haven asset is emerging more in the dollar index and Treasury yields, due to which gold is currently under pressure." This unusual setup means gold is not reacting in its traditional manner despite heightened war-linked tension, something traders would normally bank on for upward momentum.
While cautioning against expectations of a major rally at current levels, Patel was clear about the threshold gold must clear to regain bullish momentum."Unless it goes below 5000, I don't think gold can see much upside. I think it is consolidating right now," he said. The consolidation zone is creating a tight range that traders should carefully monitor. Despite the subdued outlook, Patel made it clear that gold still fares better than silver in the present environment."Today, if you look at gold and silver, gold seems a little safer compared to silver. So I would recommend avoiding silver," he advised.
Trading Strategy: Buy on Dips, Strict Stops
Patel's tactical recommendation for traders is to remain selective and disciplined
- Buy on dips at Rs 158,000
- Target at Rs 160,000
- Stop-loss at Rs 157,300
His emphasis on tight risk control underscores the delicate balance gold is maintaining amid conflicting macro forces.
Why Gold Is Still the Relatively 'Safer' Precious Metal Today
Even though gold is not surging the way it traditionally does during geopolitical flare-ups, Patel maintains that within the precious-metals basket, it remains the preferable bet. His reasoning, "Gold seems a little safer compared to silver," especially because silver is more exposed to industrial demand sensitivity, and the broader commodities complex is reacting directly to dollar strength.
source: EconomicTimes
(Disclaimer: The above article is meant for informational purposes only, and should not be considered as any investment advice. ET NOW DIGITAL suggests its readers/audience to consult their financial advisors before making any money related decisions.)
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