Gold Price Prediction Today: Upside Limited Amid Lack of Positive Catalysts
Gold prices are currently experiencing an upward trend, but the absence of significant positive catalysts may restrict further gains this week, according to Maneesh Sharma, AVP - Commodities & Currencies at Anand Rathi Shares and Stock Brokers. The precious metal started the week on a subdued note, with sideways trading movements as market participants await fresh cues from geopolitical developments and policy announcements.
Geopolitical and Economic Factors Influencing Gold
Recent actions by US President Donald Trump have introduced new dynamics into the market. Following a Supreme Court verdict against his broad tariffs, Trump announced a new framework imposing a global levy of 15% on items imported into America, the maximum allowed under the statute. This move has sparked concerns about potential retaliatory measures and economic disruptions to global supply chains, which have helped limit losses in the precious metals sector.
Trump is set to take center stage early Wednesday morning for his State of the Union address, where he is expected to defend his turbulent second term and make a final appeal ahead of the November congressional elections. This high-profile event could provide additional market direction.
Market Movements and Technical Analysis
Spot Gold surged to three-week highs after the US tariff decision, keeping bullish sentiment in the spotlight. However, prices lacked sustained buying at the start of the week as traders awaited further comments from US officials on tariff policies. Concurrently, the US Dollar attracted fresh buyers following the Federal Reserve's hawkish outlook released last week, exerting downward pressure on commodities, including gold.
From a technical perspective, the strong upward move at the beginning of the week validates last Friday's breakout above the $5,090 per ounce mark, suggesting potential for further upside momentum. Despite this, the lack of a positive catalyst may hinder sustained gains this week, though a test of levels between $5,320 and $5,370 per ounce cannot be ruled out in the coming weeks.
Economic Data and Fed Policy Implications
Recent economic data has reinforced expectations regarding Federal Reserve policy. The US Personal Consumption Expenditures (PCE) Price Index increased by 2.9% over the 12 months through December, with the core gauge, excluding volatile food and energy components, advancing 3.0% year-over-year. This data supports the view that the Fed is unlikely to cut interest rates in March.
Nevertheless, traders are still pricing in the possibility of two 25-basis-point rate cuts by the Fed this year, according to CME Group's FedWatch Tool. This expectation should act as a tailwind for bullion prices in the medium to long term.
Weekly Outlook for Precious Metals
Spot Gold (Current Market Price: $5,170 per ounce) – The bias is sideways to positive, with support levels identified at $5,090 to $5,050 per ounce.
Spot Silver (Current Market Price: $87.90 per ounce) – The bias is also sideways to positive, with a higher-side target ranging from $92 to $93 per ounce.
Geopolitical Risks and Market Catalysts
The risk of a military conflict between the US and Iran persists this week, which could drive precious metal prices higher. However, prices may trade sideways ahead of negotiations scheduled for Thursday in Geneva, following Iran's submission of a detailed nuclear proposal. Reports indicate that President Trump is considering a potential military strike against Iran in the coming days, with the possibility of a larger assault if diplomacy fails to curb Tehran's nuclear ambitions.
Additionally, the reopening of Chinese markets on Tuesday after a long holiday is expected to boost trading volumes for silver and other metals. Overall, silver is anticipated to build on recent advances as investors seek traditional safe-haven assets.
Key Events to Watch
Short-term traders should monitor a series of important macroeconomic releases this week, including:
- US Producer Price Index
- Consumer confidence figures
- Weekly initial jobless claims
Speeches from influential Federal Open Market Committee (FOMC) members could also provide market impetus, offering further insights into monetary policy directions.
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.
