Gold prices are moving in a limited range and analysts believe this trend may continue in the near term. Maneesh Sharma, AVP – Commodities & Currencies at Anand Rathi Shares and Stock Brokers, shared his outlook for gold investors.
Recent Price Movement
Last week, gold prices went up in the first half but lost those gains later. This happened after the US released stronger-than-expected Producer Price Index (PPI) inflation data, which showed inflation is still high. Because of this, traders reduced their expectations of a rate cut by the US Federal Reserve (Fed) in September. Higher interest rates usually hurt gold prices, so this news pulled gold lower.
Demand in India and Asia
In India, demand for gold improved slightly last week as the price drop encouraged buyers. Jewellers also placed good orders at the India International Jewellery Show, ahead of the upcoming festive season (Dussehra and Diwali in October). Buying gold during festivals is considered lucky in India.
In other Asian countries, demand was weak. Chinese buyers in particular stayed cautious due to high prices and no new import quotas being announced.
What’s Next for Gold?
This week, gold prices are likely to remain range-bound as investors wait for the Jackson Hole symposium, where Fed Chair Jerome Powell will speak. His comments will give more clarity on possible interest rate cuts. Markets are expecting one or two rate cuts this year, but the higher inflation data has created uncertainty.
On the global side, the US dollar looks weak, and the euro is gaining strength. A weaker dollar usually supports gold prices, so this could limit gold’s downside in the coming week.
Key Levels to Watch
- India (MCX October futures): Gold may trade between ₹97,200 and ₹1,01,500 per 10 grams. Current price: ₹99,360.
- Global market: Gold is expected to move between $3,310 and $3,365 per ounce this week.
Geopolitical Factors
A recent Washington summit gave some hope for peace talks and security guarantees from the US. However, this only had a short-term effect on gold prices.
Conclusion
gold is expected to stay range-bound. The biggest triggers this week will be the Fed meeting minutes and Jerome Powell’s speech. Investors should watch these events closely as they could decide the next big move for gold.
