Gold is showing strong signs of renewed leadership within the precious metals space, supported by both relative valuation signals and a confirmed technical breakout. While silver has already delivered a sharp rally in recent months, the current market structure suggests that gold may now outperform silver on a relative basis over the medium term.
A combination of the Gold–Silver ratio approaching a historic support zone and gold breaking out of a classic cup-and-handle formation strengthens the case for adding gold to a diversified precious metals portfolio.
Gold–Silver Ratio Near Key Historical Support
The long-term Gold–Silver ratio has once again approached the 65 zone, a level that has repeatedly acted as a significant inflexion point since 2014. Historically, whenever the ratio stabilised in this region, it was followed by a period in which gold outperformed silver meaningfully.
- The 65 level has acted as a strong structural support.
- Past rebounds from this zone marked trend reversals in relative performance
- Current setup mirrors earlier cycles that favoured gold.
This suggests that while silver may not necessarily decline, its relative outperformance is stretched, increasing the probability that gold will take the lead in the next phase.
This creates a scenario in which gold can outperform even if both metals continue to rise, making gold a more attractive medium-term allocation.
Gold Breaks Out of a Classic Cup-and-Handle Pattern
From a technical perspective, gold has delivered a high-confidence bullish signal by breaking out of a well-formed cup-and-handle pattern on MCX Gold Futures.
Key Technical Highlights:
- Strong rally during September–October formed the cup
- Healthy consolidation created a shallow handle.
- Breakout above ₹1,32,000–₹1,33,000, a long-standing resistance zone
Cup-and-handle formations are typically seen in strong trending markets, and breakouts from such structures often lead to sustained multi-month advances.
Upside Targets and Technical Projections
Measured move projections from the depth of the cup suggest a potential upside of 11–13% over the medium term.
Additional confirmation comes from Fibonacci extension levels, which point to higher targets in the:
- ₹1,44,000 – ₹1,50,000 zone on MCX Gold Futures
As long as prices remain above the breakout zone, the broader technical structure remains constructively bullish.
Macro Tailwinds Support Gold’s Strength
Beyond technicals, the macro environment continues to favour gold:
- Rising bond yields increase volatility across asset classes
- Inflation expectations remain elevated
- Hard assets act as a hedge against currency debasement.
- Central bank diversification trends support long-term demand
In such an environment, gold offers stability, liquidity, and portfolio protection, reinforcing its role as a core asset.
Portfolio Strategy: Why Gold Makes Sense Now?
For investors building or rebalancing a precious metals portfolio, the current setup clearly favours gold:
- Relative valuation supports gold over silver
- Technical breakout confirms trend continuation.
- Risk-reward is more favourable at current levels.
- Structural uptrend remains intact.
- Rupee weakness also supports gold prices
This does not imply weakness in silver, but rather highlights that gold is better positioned to outperform relative to silver in the coming months.
Conclusion: Gold Enters the Next Phase of Its Structural Uptrend
Just as silver entered a strong rally after a prolonged consolidation, gold now appears to be stepping into the next leg of its long-term uptrend. The combination of historical ratio support, clean technical breakout, and supportive macro conditions creates a compelling case for gold.
As long as prices hold above the breakout zone, gold remains well positioned to deliver steady medium-term gains, making it a preferred choice in the precious metals space at this stage.
Our View on Gold in Media:
- Business Standard published our views on Gold to catch up with Silver, may hit ₹1,50,000
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