Gold has lost its steam. The metal is hovering in a tight ₹150,000–₹155,000 band, struggling to find direction after a recent correction. Manav Modi, Senior Analyst at Motilal Oswal, notes that while buying interest emerged near ₹148,000, the inability to hold above ₹160,000 has capped the upside. The daily structure remains mixed, with prices currently sitting just below the 20-day average of ₹154,235. This level—along with the Bollinger Band mid-point—acts as the immediate hurdle. Clearing ₹155,000 could open the door to ₹157,000, but for now, the path is blocked.
The technicals paint a fragile picture. Fibonacci retracement levels from the recent swing (₹140,000 to ₹164,000) place critical support at ₹152,000 (50% retracement) and resistance at ₹158,300 (23.6% retracement). Prices are currently wedged between the 38.2% (₹154,800) and 50% (₹152,000) levels. A break below ₹152,000 would likely trigger a slide toward ₹149,000–₹148,200, aligning with the lower Bollinger Band. Holding above this zone, however, could fuel another attempt at recovery. The bias for the week is neutral, with a slight negative tilt if support fails.
Macro headwinds are intensifying. The Federal Reserve raised its benchmark rate by 25 bps to 3.75%–4.00% last week—the first hike in three years. Chair Kevin Warsh reiterated the commitment to a 2% inflation target, with projections suggesting another increase by December. Although Treasury yields initially dipped, the 10-year yield has rebounded toward 5%, keeping real-yield pressure high on non-yielding bullion. Inflation is not expected to hit the 2% target until 2029, keeping 'higher-for-longer' rates firmly in the market’s crosshairs.
Geopolitics offer the only potential tailwind. Markets are closely watching upcoming talks between Presidents Trump and Xi Jinping, where tariffs and AI regulations are key topics. Progress could reduce safe-haven demand, while renewed trade friction might boost gold. Middle East tensions remain elevated following Houthi attacks on Saudi Arabia, but softer crude prices and potential US-Iran diplomatic talks have dampened immediate energy-driven inflation fears. For the week ahead, the direction of gold hinges on US-China developments, Treasury yields, and the dollar’s strength.