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Gold price outlook: Gold prices have come under pressure in recent trading sessions, with the precious metal struggling to find support despite a sharp correction in crude oil prices. With the US Federal Reserve maintaining a hawkish stance, expectations of further interest rate hikes and a strengthening US dollar have weighed on bullion sentiment.
On the Multi Commodity Exchange (MCX), gold prices are trading near ₹1,38,500 per 10 grams, down from recent highs. Meanwhile, international spot gold is hovering around $3,955 per ounce.
Market experts remain divided on the near-term outlook, with some cautioning against further downside while others believe a recovery is possible if macroeconomic conditions turn favourable.
Several global macroeconomic factors are currently influencing gold prices, with the US Federal Reserve's monetary policy outlook emerging as the biggest driver.
According to Anuj Gupta, SEBI Registered Research Analyst, gold is facing selling pressure amid expectations that the US Federal Reserve could raise interest rates by 50 basis points.
A potential rate hike would make interest-bearing assets more attractive compared with non-yielding assets such as gold, potentially triggering further selling in precious metals.
Gupta said gold is currently under pressure, with international spot prices trading near $3,955 per ounce, close to the session's low. On MCX, prices are hovering around ₹1,38,500 per 10 grams.
Another factor weighing on gold is the strengthening US dollar. A stronger dollar generally makes dollar-denominated commodities more expensive for holders of other currencies, potentially reducing demand for bullion.
Interestingly, gold has failed to benefit meaningfully from the recent correction in crude oil prices. Crude has declined from around $118 to $92 per barrel amid progress in US-Iran diplomatic efforts.
Typically, lower crude oil prices ease inflationary concerns, which can support expectations of lower interest rates and benefit gold. However, the current hawkish stance of the US Federal Reserve and hotter-than-expected US inflation data have overshadowed this supportive factor.
According to Gupta, the Fed's stance is currently outweighing the positive impact of lower crude oil prices, keeping gold under pressure.
Kaynat Chainwala, AVP - Commodity Research at Kotak Neo, said the dominant driver for gold remains the outlook for US monetary policy and real yields, despite the recent decline in crude oil prices.
According to her, gold's recovery will largely depend on softer US inflation data, easing expectations of interest rate hikes and a weaker dollar.
Gold could revisit the ₹1.50 lakh per 10 grams level on MCX by December 2026, but the recovery would depend on a meaningful improvement in the global macroeconomic environment, according to market experts.
Kaynat Chainwala of Kotak Neo believes the target is achievable, although it would require gold prices to gain around 8% from their current levels of nearly ₹1.385 lakh per 10 grams.
She said that softer US inflation data, easing interest rate hike expectations and a weakening dollar could provide the necessary support for bullion prices.
However, gold has so far struggled to sustain gains above the ₹1.46 lakh per 10 grams level on MCX. According to Chainwala, a decisive breakout above this level would signal improving momentum in the precious metal.
On the international front, a sustained breakout above $4,220 per ounce in spot gold, supported by a less hawkish Federal Reserve and lower real yields, could pave the way for MCX gold prices to advance towards the ₹1.49 lakh- ₹1.52 lakh range.
However, Anuj Gupta has a more cautious outlook on precious metals. He believes gold and silver could witness further selling pressure if the US Federal Reserve proceeds with a 50-basis-point interest rate hike.
Gupta cautioned that investors should not anticipate any meaningful relief rally in precious metals in the near term.
From a technical perspective, he identified $3,800 per ounce as a crucial support level for international gold prices. A breach below this level could extend the downside, with prices potentially testing $3,400 per ounce.
Meanwhile, Kaveri More, Commodity Technical Analyst at Choice Broking, said that from a technical perspective, sustaining above the 142800–146100 for breakout, along with improving buying interest, will be crucial for strengthening the recovery momentum and opening the possibility of testing ₹1.50 lakh.
“However, the recovery may face challenges if US inflation remains elevated, keeping the Federal Reserve on a hawkish path, while rising Treasury yields and a stronger dollar could continue to pressure bullion prices. Profit-booking and easing geopolitical tensions may further restrict the upside. On the downside, a break below 137300—124900 could weaken the technical structure and expose gold to further correction. Overall, the ₹1.50 lakh level remains achievable by year-end, but investors should watch for sustained buying confirmation and key support levels before taking aggressive positions,” More said.
Disclaimer: This story is for educational purposes only. The views and recommendations above are those of individual analysts or broking companies, not Mint. We advise investors to check with certified experts before making any investment decisions.
Vaamanaa covers business and stock market news. Started in 2020, she has been producing news on digital platforms for over 4.5 years now. She writes on markets, commodities, IPOs, and industry. She has worked for news channels like Jagran New Media and Business Insider India. You can reach out to her at vaamanaa.sethi@htdigital.in.
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