Gold and silver prices have swung sharply this year due to fundamental changes like central bank policies, geopolitical uncertainties, debate between hard and soft landing, higher buying interest in riskier assets and volatility in the Dollar Index and bond yields. Of the above, geopolitics and the central banks’ policy position have taken centre stage. The volatility until now has been fierce as gold marked a near all-time high of $2,070 at the start of this year and then reversed from lows of $1,800 to $2,000, according to a Motilal Oswal Financial Services report.  

Demand for bullion typically rises during festive periods. However, recent trends show people now invest when there is a good opportunity rather than waiting for a particular reason. Numerous factors contribute to the bullish trend seen in the gold market, and these reasons often change.  

Major central banks around the world have been steadily increasing their gold reserves, which has boosted sentiment for gold. We have only seen two months this year where central banks were net sellers; the pace of buying so far this year suggests that central bankers are on track for yet another strong annual addition. Strong buying from China, Poland, Turkey, Kazakhstan, and a few other countries has resulted in a net total of around 800 tonnes in this year, per the report.