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Gold and Silver rebounds on bargain hunting and US partial shutdown AUGMONT BULLION REPORT
- Gold and silver have rebounded nearly 10% from recent lows as markets factor in the absence of key US economic data due to a partial government shutdown and renewed bargain hunting. The shutdown began after Congress failed to fund the Labor Department and other agencies, adding short-term uncertainty.
- The sharp correction—around 25% in gold and 45% in silver from recent highs—has attracted strong physical buying from investors who were waiting for meaningful price retracements to accumulate precious metals.
- Meanwhile, the US–India trade deal has supported the Indian rupee, with USD/INR appreciating toward 90.20, up nearly 1%. While tariff cuts to 18% improve trade relations, reduced uncertainty and a stronger rupee may temporarily cap domestic gold and silver prices by easing safe-haven demand and lowering import costs, despite supportive long-term fundamentals.
Technical Triggers
- Gold prices may extend the ongoing rebound toward $5,000 (~Rs.155,000), with strong support seen near $4,600 (~Rs.139,000).
- Silver is attempting to build a base and is expected to consolidate in the $72–$87 range (~Rs.225,000–Rs.270,000). A buy-on-dips and sell-on-rallies strategy is advisable within this range amid elevated volatility.
Support and Resistance
| Metal | Market | Support Level | Resistance Level |
|---|---|---|---|
| Gold | International | $4600 / oz | $5000 / oz |
| Gold | India | ₹139,000 / 10 gm | ₹155,000 / 10 gm |
| Silver | International | $72 / oz | $87 / oz |
| Silver | India | ₹225,000 / kg | ₹270,000 / kg |
source: AUGMONT BULLION REPORT
A staggering 14% rally in January took gold above the US$5,000 mark, cementing the 5k number as a headline to match the first recorded annual 5,000 tonnes of total demand. The month closed at US$4,982/oz and scored 12 all-time highs. But it was not without drama with large intraday swings on the last two days of the month.
Our Gold Return Attribution Model (GRAM) showed an unusually large contribution from implied volatility (c.50% of January’s return), reflecting substantial option market activity. This variable currently sits in risk & uncertainty, although is likely more reflective here of momentum.Â
Global gold ETF flows provided plenty of support adding 120t in January to take holdings to a new record, valued at US$669bn. The flows were dominated by Asia (62t) and North America (43t) while Europe saw more modest inflows
Key Price Figures (January 2026)
The month was characterized by relentless momentum, scoring 12 all-time highs before ending with significant intraday volatility.
| Metric | Value (USD) | Peak Date |
| January Closing Price | US$4,982/oz | Jan 30, 2026 |
| All-Time Record High | US$5,307/oz | Jan 28, 2026 |
| Monthly Return | +14.1% | — |
Performance in Other Major Currencies (Jan Return):
- INR: +23.9% (Record high: ₹176,306/10g)
- RMB: +19.2% (Record high: ¥1,248/g)
- EUR: +13.0% (Record high: €4,444/oz)
Major Market Drivers
- Momentum & Options (GRAM Model): Approximately 50% of January’s return was attributed to implied volatility and massive options market activity rather than pure macro fundamentals.
- ETF Inflows: Global gold ETFs added 120 tonnes (valued at US$669bn), the strongest month on record.
- Asia: 62t (led by China)
- North America: 43t
- Europe: 13t
- The “Warsh Effect”: Late-month drama was fueled by the nomination of Kevin Warsh as the next Fed Chair. Markets perceive him as a “hawk” favoring a smaller Fed balance sheet, which triggered a sharp intraday correction from the $5,300 peaks.
Macro Outlook: The Inflation Resurgence
While geopolitics dominated January, the narrative is shifting toward resurgent US inflation risks for the remainder of 2026. Key triggers include:
- Tariff Pass-through: Lagged effects of trade policies hitting consumers.
- Fiscal Stimulus: Prospective $2,000 “tariff dividend” checks and ACA subsidies ahead of the US mid-term elections.
- Tight Labor: A falling breakeven employment rate and rising household inflation expectations.
Investment Implications
- Stock-Bond Correlation: Inflationary shocks are making stocks and bonds move in the same direction, reducing the efficacy of traditional 60/40 portfolios.
- Gold’s Role: Gold is increasingly viewed as a left-tail hedge and a “hard money” alternative as sovereign debt levels (reaching 30% of the $340T global sector debt) raise debasement fears.
The gold market is likely to “pause” after the January surge, but the combination of fiscal expansion and Fed leadership uncertainty suggests investment demand will remain a structural feature of 2026.
source :WGC
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