Gold Price Prediction: Volatility and Range-Bound Trading Ahead
Gold prices are expected to remain volatile and range-bound in the near future, according to Manav Modi, Senior Analyst of Commodity Research at Motilal Oswal Financial Services Ltd. This outlook comes as the precious metal experiences significant market turbulence following a sharp correction from recent record highs.
Market Forces Driving Gold's Recent Correction
Gold and silver concluded the previous week on a notably weaker note after undergoing a violent correction from their peak levels. This downturn was primarily triggered by a rebound in the US dollar and shifting expectations surrounding US monetary policy leadership. Reports indicating that the Trump administration is nominating Kevin Warsh have forced markets to reassess their expectations for interest rate cuts, contributing to the selling pressure.
Additionally, profit-taking from exchange-traded funds (ETFs) and speculative investors has further weighed on precious metal prices. While the broader macroeconomic backdrop—characterized by fiscal stress, geopolitical uncertainty, and long-term policy accommodation—remains fundamentally supportive for bullion, the scale of the recent rally had left prices vulnerable to a significant correction.
Domestic and Global Factors Influencing Gold
On the domestic front, the Union Budget 2026-27 delivered no surprises for precious metals, maintaining a policy-neutral stance. This has shifted market attention toward upcoming economic indicators and central bank decisions that will likely determine the direction of gold prices in the coming weeks.
Key events to watch include the Reserve Bank of India's monetary policy decision, US jobs data releases, and Purchasing Managers' Index (PMI) figures from major economies. These data points will be crucial in assessing whether the current correction stabilizes or extends further into bearish territory.
Technical Analysis and Key Price Levels
From a technical perspective, the overall trend for gold remains positive. However, recent selling pressure and profit booking have altered the behavior and structure of the price chart. Currently, prices are trading well outside the Bollinger Band and below important support zones, indicating potential oversold conditions.
Important technical indicators, such as the Relative Strength Index (RSI), are approaching previous lows amid the price decline, suggesting that a rebound might be imminent. For investors and traders, the following key levels are critical to monitor:
- Major Support Zone: Near Rs 1,25,000
- Near-Term Support: Rs 132,000 on the higher side
- Immediate Resistance Levels: Rs 155,000 and Rs 160,000
Investment Strategy and Cautionary Advice
Given the current market conditions, some caution is warranted to avoid panic selling. Modi recommends maintaining a range-bound stance for the coming week, as prices are likely to fluctuate within defined levels rather than trending decisively in one direction.
Investors should remain vigilant about global economic developments, particularly changes in US monetary policy and geopolitical tensions, which could trigger sudden price movements in either direction.
Disclaimer: Recommendations and views on the stock market, other asset classes, or personal finance management tips given by experts are their own. These opinions do not represent the views of The Times of India.
