Gold Price Forecast
With ongoing global economic uncertainty, gold prices seem likely to fluctuate within a specific range in the near future. Manav Modi, a senior analyst at Motilal Oswal Financial Services Ltd, provides insights into the gold market and suggests strategies for investors.
Last week, gold prices soared to record levels domestically. Various factors contributed to this rise, including interest rate cuts, disappointing US employment figures, and uncertainties related to tariffs. The dollar index hovered between 98 and 99. This followed the US’s release of strong consumer confidence data, which was later overshadowed by the downbeat employment growth in July and revisions to past wage data, pointing to a weakened labor market that had previously buoyed bullion prices.
Reports emerged last week about the US imposing significant tariffs on Swiss gold bars, which initially caused a spike in prices before being disproven. Additionally, President Trump announced a meeting with Russian President Putin scheduled for August 15 to discuss the Ukrainian conflict. Meanwhile, trade negotiations with China are approaching a deadline on August 12.
Furthermore, Trump is expected to nominate economist Milan as federal governor after Powell’s retirement. Despite early-week increases in physical gold demand in Asia, prices pressured demand later on, particularly as disappointing inflation data from China also affected industrial metals like silver. The market is currently looking toward critical US data on inflation, retail sales, and industrial production.
This week’s data will be vital, particularly if the US consumer price index (CPI) exceeds expectations. A better CPI report could imply that tariff effects are beginning to influence prices, potentially altering expectations around interest rate cuts for this year and the next. Indian foreign exchange reserves have fallen to their lowest levels in 2025, hinting at a more active role for the Reserve Bank of India in market movements and the USDINR exchange rate.
As the domestic market enters a holiday week, monitoring USDINR fluctuations becomes even more crucial. Additionally, ongoing commentary regarding Trump’s stance on the Russia-Ukraine situation, along with updates on tariffs affecting India and China, will be closely watched.
Gold Outlook: Price Range of 99,500-1,02,000
(Disclaimer: The recommendations and viewpoints shared by experts regarding stock markets and asset classes are unique and do not reflect collective opinions.)
