Gold prices are expected to remain under pressure over the next month, driven by global macroeconomic factors, according to market analysts. Volatility is likely to persist as investors closely monitor the US Federal Reserve's policy trajectory, inflation trends, the US dollar, and geopolitical developments.
Current Price Levels and Support
Spot gold (XAU/USD) was trading around USD 4,022 per ounce. Riteshkumar Sahu, Senior Manager-Commodities Research at Kotak Neo, told ANI that immediate support is placed at USD 3,950 per ounce, while resistance is seen at USD 4,200 per ounce. A break below support could drag prices towards the USD 3,800-3,400 range, whereas a sustained move above resistance could push prices towards the USD 4,600-4,800 range.
On the domestic front, MCX Gold was trading around Rs 1,43,127 per 10 grams, with immediate support at Rs 1,37,500 and resistance at Rs 1,45,500. According to Sahu, a break below support could take prices towards Rs 1,34,000-1,25,500, while a move above resistance could lift prices towards Rs 1,52,000-1,60,500.
Factors Pressuring Gold
Sahu noted that renewed strength in the US dollar, strong US jobs data, and expectations that the Federal Reserve could still raise interest rates later this year continue to keep pressure on gold. He said spot gold has declined by more than 3.5 per cent this week and nearly 12 per cent this month, putting prices on track for a fourth consecutive weekly and monthly decline.
Ravindra Kumar, Senior Research Analyst at SMC Global Securities, said easing geopolitical tensions following progress in the US-Iran peace process have reduced safe-haven demand for gold, while the sharp decline in crude oil prices could help cool inflationary pressures and eventually allow the Federal Reserve to adopt a relatively softer policy stance if inflation continues to moderate.
However, he said bullion remains under near-term pressure from a stronger US dollar, expectations of tighter global monetary conditions, and renewed risk-off sentiment following the Bank of Japan's interest rate hike. Kumar also cited concerns over the increasing adoption of Artificial Intelligence (AI) and its potential impact on global employment and economic growth as factors contributing to broader market volatility and intermittent selling pressure in precious metals.
Technical Outlook and ETF Flows
From a technical perspective, Sahu said spot gold has held above the key chart support near USD 3,960 per ounce and formed an inside-candle pattern, indicating the market is awaiting fresh directional triggers. A move above USD 4,045 per ounce could trigger a short-term recovery towards the 20-day moving average near USD 4,200, while USD 3,960 remains the key technical support level.
Sahu added that continued outflows from gold-backed exchange-traded funds (ETFs), although at a slower pace than in previous weeks, indicate investor interest has improved marginally but remains below last year's levels. Comments from Federal Reserve officials and US consumer sentiment data will be closely watched for the next directional move in gold prices.
Medium-Term Outlook
Amit Gupta, Senior Research Analyst (Commodity) at Kedia Advisory, told ANI that gold prices could witness some downside over the next month in line with key support levels. However, given a window of three months, a jump could be seen, he said, adding that persistent central bank gold purchases, safe-haven demand, and gradual rupee depreciation are likely to keep the broader trend supportive over the medium term despite near-term volatility.
Over the three-month horizon, Gupta expects MCX Gold to find support near Rs 1,35,000 with potential upside towards Rs 1,60,000, while MCX Silver could find support around Rs 1,90,000 with upside extending towards Rs 2,60,000.
Anantha Padmanaban, Former Chairman of All India Gem & Jewellery Domestic Council (GJC), also expected gold prices to remain under pressure for a month but recovery afterwards. He said this year's India International Jewellery Show (IIJS) is expected to witness strong business activity if gold prices remain under pressure or continue to fluctuate. "This year, IIJS is going to be a very big hit if prices remain under pressure or move either way. Over the last few months, many jewellers have reduced their inventories for one reason or another and are expected to refill their stocks ahead of the long festive season," he told ANI.
