Gold, silver most secure choices for investments?

Last week was relatively quiet on the geopolitical stage as the US and Iran continued their negotiations, with neither side reaching an agreement on various issues. This lack of resolution did not impact the financial markets, which have been grappling with uncertainty for several months.

Any eventual agreement or disagreement will undoubtedly have some ramifications on the market.

In a different development, the partial shutdown of the US government concluded last Tuesday when the House passed a temporary spending bill, allowing negotiations to resume. This development has contributed to a sense of stability in the financial sector. Additionally, data from the US Purchasing Managers Index (PMI) indicate that activity in the manufacturing sector is on the rise.

However, the S&P has faced challenges as investors express concerns regarding the overall effects of AI (artificial intelligence) technology. There is anxiety that AI could diminish the demand for traditional software products and services. The issue lies in the fact that large investments are being funneled into AI infrastructure, yet investors are apprehensive about whether these investments will yield proportional returns.

There is also growing concern that AI might negatively impact several established software businesses, while the substantial investments in artificial intelligence now appear to carry greater risk.

On the jobs front, the latest US economic data indicate that turmoil in the AI sector is causing disruptions in the labour market.

Meanwhile, the Reserve Bank of Australia (RBA) raised its cash rate by 25 basis points to 3.85%. The RBA Governor noted that demand within the economy is outpacing expectations, necessitating action to address the imbalance.

As a result, the RBA has opted for tighter monetary policy to temper demand and enhance productivity.

Meanwhile, as anticipated, the European Central Bank (ECB) maintained its interest rate at 2 percent. Officials remain confident that the medium-term goal of a 2 percent inflation target will be met. In a recent press conference, Christine Lagarde acknowledged that risks are “broadly balanced,” although the rise in energy prices remains a point of concern. She believes that appreciation of Euro will help alleviate inflationary pressures.

Similarly, the Bank of England voted 5-4 to keep its rate steady at 3.75 percent.

Last week, gold continued to trade within a broader range. The recent fluctuations have been so extreme that the CME Group, which oversees COMEX for precious metals, has raised the margin requirements multiple times since the last week of December 2025.

This scenario can be attributed to two main factors. First, there is considerable volatility in the market, and second, there are insufficient signs indicating that commodity prices, particularly those of gold and silver, are stabilizing rather than declining. This often leads buyers to seize opportunities during price drops.

This situation must be particularly frustrating for regulators and policymakers, as these price swings are beyond their control and raising the margin seems to be their primary tool.

In my opinion, this increase in margin requirements may trigger some selling pressure and force leveraged traders who can’t meet the collateral demands to liquidate their positions.

However, the core issue remains how to discourage large investors from making purchases. These investors recognise that a weak US dollar and potential sanctions could discourage investments in US assets.

At present, gold and silver seem to be the most secure choices for investments. Additionally, gold is included in the foreign exchange reserves portfolios of central banks.

This is why there will always be buyers for gold and silver during declines. The key question is at what price level this occurs.

I believe that in the long term, anything near USD 4200 for gold and between USD 50 to USD 60 for silver would be optimal buying levels, as both metals are expected to continue rising unless supply outstrips demand or physical gold and silver holders decide to sell off their assets.

In the coming week, several crucial economic indicators from the US are set to be released, which could provide insights into the economy’s trajectory. Retail sales will be reported on Tuesday, followed by the delayed Non-Farm Payroll announcement on Wednesday. Weekly jobless claims and US Existing Home Sales will come out on Thursday, and the significant January inflation data (CPI) will be released on Friday.

WEEKLY OUTLOOK — FEB 9-13

GOLD @ USD 4965— Much will hinge on the results of the indirect US-Iran discussions. As of now, things seem promising, with the next meeting anticipated for February 11-12. If everything proceeds well, we could witness a correction in gold prices. On the positive side, if gold breaks above USD 5090, it may rise towards USD 5220. However, there is a downside risk. A drop below USD 4770-80 could lead to a decline towards USD 4620. Market volatility is expected to persist.

EURO @ 1.1816— Following a slight decline, the Euro is anticipated to rebound. The support level at 1.1720 is likely to remain intact. If the price breaks through 1.1920, it will promote a rise to 1.2020. If not, it may drop to 1.1650.

GBP @ 1.3613— Pound Sterling is expected to receive support at 1.3480 for its upward movement. If it breaks through 1.3780, it could drive Cable toward 1.3850.

JPY @ 157.20— This week, I anticipate some fluctuations in the Japanese Yen. The currency has faced pressure mainly due to the snap election, which significantly influences its value, although it has strengthened amid concerns over potential intervention by the Bank of Japan (BOJ).

The Liberal Democratic Party (LDP) and Prime Minister Takai are projected to secure a significant victory. She supports growth-oriented policies and is likely to increase spending, which may not favor a stronger Yen.

However, this growth stimulus and the expansionary fiscal approach are expected to drive inflation higher, potentially undermining the JPY.

If the Yen breaks through the 160.50 level, it could rise to 162.20. Conversely, should the BOJ decide to intervene, crucial levels to monitor would be 154.10 and 151.50.

Copyright Business Recorder, 2026