The gold price prediction suggests a continued upward trend, despite potential short-term consolidation. According to Manav Modi, Senior Analyst, Commodity Research at Motilal Oswal Financial Services Ltd., the precious metal has exhibited a definitive positive shift in the short term, pushing past its recent consolidation range to approximately Rs 155,145.
This current trajectory places the price in proximity to the upper boundary of its recent trading range, establishing Rs 157,500–158,000 as a crucial resistance zone for the upcoming week. A sustained breakthrough beyond this level could pave the way for gold to reach Rs 160,000. Conversely, a failure to surpass this resistance might trigger a period of profit-taking.
On the support side, immediate levels are identified at Rs 152,000–153,000, with a more significant support area around Rs 147,000. Further technical indicators, such as the 20-day Bollinger Band average, are situated at Rs 147,008, while the upper and lower bands are at Rs 157,600 and Rs 136,415, respectively. Although prices are hovering near the upper Bollinger Band, indicating robust upside momentum, the possibility of brief consolidation cannot be entirely discounted.
Analyzing the recent price fluctuation from approximately Rs 139,000 to Rs 158,000 using Fibonacci retracement levels, key support points emerge around Rs 153,500, Rs 150,700, Rs 148,500, and Rs 146,000. The initial retracement zone at Rs 153,500 offers immediate support, with the Rs 150,700–148,500 range forming a more robust support area.
Overall, the weekly outlook for gold remains bullish as long as prices maintain above Rs 152,000. The immediate hurdle is Rs 157,600–158,000, with a subsequent target of Rs 160,000. A decline below Rs 147,000 would undermine this positive setup and could bring the Rs 140,000–142,000 range back into consideration.
Gold demonstrated a strong performance during the August 10–17 period, holding above the $4,300/oz mark and briefly touching $4,400. This upward movement was fueled by softer US inflation and labor market data, which diminished expectations of an imminent Federal Reserve rate hike. Specifically, July’s Consumer Price Index (CPI) aligned largely with forecasts, while the Producer Price Index (PPI) came in lower than anticipated, bolstering the argument for the Fed to maintain its current interest rate policy in September.
Currently, market participants perceive only about a one-in-three chance of a September rate hike. Geopolitical events also contributed to market volatility, with ongoing uncertainties surrounding the reopening of the Strait of Hormuz causing oil prices to surge periodically and sparking concerns about renewed inflationary pressures. Concurrently, China has provided a significant underlying boost to gold, with the People’s Bank of China extending its gold-buying spree for the 21st consecutive month, alongside continued inflows into Chinese gold Exchange Traded Funds (ETFs).
The depreciation of the US dollar has further supported bullion prices. Furthermore, the resurgence of strength in the Japanese Yen and anxieties surrounding potential currency intervention have underscored gold’s established role as a reserve asset and a hedge against currency risks. Moving forward, the outlook for gold remains cautiously optimistic. Key factors influencing its trajectory will include Federal Reserve expectations, US inflation and labor data, developments concerning the Strait of Hormuz, and sustained demand from central banks, which are all likely to dictate the next significant price movements in the business of precious metals.
