Gold and silver prices are expected to witness sharp volatility next week as traders track key economic data and assess heightened geopolitical uncertainty following the US capture of Venezuelan President Nicolas Maduro, analysts said.

Investor focus will be on major US indicators, including ISM Manufacturing data, December ADP employment figures and the unemployment rate, alongside commentary from Federal Reserve officials that could signal the central bank’s policy direction.

“Gold prices are likely to remain volatile in the week ahead as there are bullish as well as bearish factors at play,” said Prathamesh Mallya, DVP – Research, Non-Agri Commodities and Currencies, Angel One.

Experts said commodities markets could see aggressive trading from Monday, reflecting investor reaction to volatile geopolitics after the US detained Maduro and his wife in a military operation, accusing them of drug trafficking.

"The development could jolt global markets, pushing bullion and crude oil prices higher on fears of supply disruptions from Venezuela, which holds the world's largest proven oil reserves," said one of the experts.

After hitting record highs in late December, gold prices retreated in the past week. On the Multi Commodity Exchange (MCX), the yellow metal futures slumped by Rs 4,112, or 2.94 per cent.

The metal had surged to hit a record high of Rs 1,40,444 per 10 grams before slipping more than 3 per cent to settle at Rs 1,35,761 per 10 grams on Friday.

"Gold prices declined in the past week ending 2nd January 2026 after hitting record highs in late December. The recent correction in gold prices was on account of profit booking at higher levels, low liquidity due to year-end and Christmas holidays," Mallya said.

He added that the precious metal prices have traded in the range of Rs 1,34,000-1,40,000 per 10 grams over the past week, amid volatile trading conditions and heavy selling pressure.

Silver prices, too, mirrored the precious metal's volatility. On the MCX, the white metal depreciated by Rs 3,471, or 1.45 per cent, during the week.

After touching a record of Rs 2,54,174 per kilogram, silver prices tumbled by Rs 17,858, or 7.02 per cent, to finish at Rs 2,36,316 per kg on Friday.

In the international market, Comex gold futures dipped by USD 223.1, or 4.9 per cent, during the holiday-shortened week to end at USD 4,329.6 per ounce on Friday.

Silver prices also declined sharply by 8 per cent, or USD 6.18, over the past week. It had hit a new record of USD 82.67 per ounce before tumbling 14.1 per cent, or USD 11.65, to settle at USD 71.01 per ounce.

Pankaj Singh, smallcase manager and founder and Principal Researcher, Smart wealth AI, said that gold's resilience near the USD 4,300-per ounce-mark reflects heightened investor caution amid a softening US inflation backdrop and persistent safe-haven demand.

He noted that silver prices witnessed a short-term correction after CME Group hiked the margin requirement for futures trade in gold, which forced a reduction in leveraged positions and triggered tactical selling across Comex.

However, Singh said, as markets enter 2026, the core drivers of the flight to safety, monetary uncertainty, geopolitical risk, and policy-driven capital reallocation, remain firmly in place.

About the outlook for the year, he said that gold prices could climb between 10 and 60 per cent in 2026, though interim corrections of up to 20 per cent are likely in a volatile environment.

Silver, he noted, carries a 5-30 per cent downside risk. However, accelerating industrial demand introduces significant upside optionality, with prices potentially spiking up to 40 per cent from current levels if supply tightness persists.

"Structurally bullish, policy-driven precious metals cycle may continue, but risk of significant corrections is also possible," Singh said.

Investors will closely monitor the interplay between US economic data and the Fed's tone, while rising geopolitical risks could keep volatility elevated in the near term.