Gold price target achieved! MOFSL now expects yellow metal to consolidate

Motilal Oswal Financial Services (MOFSL) has forecasted that gold prices may soon enter a consolidation phase, following a substantial rally over the past few years. MOFSL noted that gold prices in India have increased from approximately ₹30,000 per 10 grams in 2019 to over ₹1 lakh by mid-2025, representing gains of more than 200% over six years.

In 2024, MOFSL’s expected levels near Rs 98,000 per 10 gram for gold price. 

Despite the upward trend, various factors that have driven the price increase are now considered to be already factored in. MOSL analyst Manav Modi stated, "We need to wait for more clarity or a decisive trigger, so a period of consolidation may be appropriate."

MOFSL's report suggests that geopolitical tensions, easing trade uncertainties, and slower central bank gold purchases have all contributed to the current price levels. While there are expectations of USD-INR movements influencing domestic prices, the firm predicts that the ongoing decline in the dollar index and de-dollarisation trends are already reflected in gold costs.

Additionally, gold's historical trends suggest a natural cap, as the Comex gold has not historically gained more than 32% in a single year over the last 25 years, with the current rally already reaching over 30%.Traders are advised to monitor key levels, with MOFSL recommending hedging or selling if prices fall below ₹96,000 per 10 grams.

The firm remains open to re-entering the market should new long-term triggers emerge, but for now, it expects prices to remain range-bound pending a clear catalyst. The suggestion for tactical traders is to consider "Hedging or exiting on a sustained close below ₹96,000 per 10 grams may be appropriate." This cautious approach reflects the signs of market fatigue at current high levels.

Hareesh V, Head of Commodity Research, Geojit Investments said, "Gold broadly traded in a range last week on feeble global cues and a recovery in the US dollar. The US President Trump's remarks helped to ease investor concerns over Powell's possible removal as Fed Chair assisted the US currency, making gold expensive for overseas currencies. The US CPI data also released last week indicating rising inflation, but it was in line with expectations. This may lead the US Fed to keen rates unchanged at least for next couple of months also affected the price of the yellow metal.

The most active MCX August futures contract traded inside Rs 98450-96829 per 10 gram while prices at the key London spot prices congested inside $3374-3309 an ounce level."

Jateen Trivedi, VP Research Analyst - Commodity and Currency, LKP Securities said, "Gold traded positive amid a weak dollar and signs of economic moderation, which increased the probability of a rate cut by the US Fed. Participants will keenly track Fed Chair Powell's upcoming speech for further cues on policy direction. Additionally, trade tariff uncertainties continue to lend support to bullion. Gold is likely to remain elevated with a price range seen between Rs 97,550–Rs 99,500 in the near term."