Gold Prices Headed for Neutral Bias Amid Global Factors
Key Highlights
- Gold prices are expected to trade at Rs 150,750 this week, following a recent decline towards Rs 146,000–147,000.
- The Bollinger Bands indicate that the upper band is near Rs 155,047 and the lower band is around Rs 145,480, with prices currently hovering near the middle of the range.
- Investment demand for gold remains strong, with inflows into gold-backed ETFs reaching a four-year high, driven by concerns over rising fiscal deficits, government debt-servicing costs, and longer-term currency debasement risks.
Gold prices are showing signs of recovery, but still face pressure from global factors. According to Manav Modi, Senior Analyst at Motilal Oswal Financial Services Ltd., the recent decline has led to a stabilisation of selling pressure, with gold moving back above the 20-day average near Rs 150,263.
The Bollinger Bands suggest that prices are currently near the middle of the range. With the upper band at Rs 155,047 and the lower band at Rs 145,480. This range has proven to be a key support zone, with prices consistently finding buying interest in the Rs 145,000-147,000 region.
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A sustained break below Rs 145,000 would weaken the medium-term structure. Meanwhile, a move above Rs 155,000 could strengthen momentum and open the way towards Rs 158,000–160,000. The recent high around Rs 163,000–165,000 remains a key target for gold prices.
Global Factors and Investment Demand
Investment demand for gold remains strong, driven by concerns over rising fiscal deficits, government debt-servicing costs, and longer-term currency debasement risks.
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Central-Bank Accumulation and Monetary Policy
Central-bank accumulation continues to provide structural support to gold prices. With the People's Bank of China adding around 740,000 ounces of gold during September, extending its buying streak to 23 consecutive months.
For the week ahead, Treasury yields, Fed communication, crude oil, and geopolitical developments are likely to influence gold prices, with the potential to determine whether the metal can extend its recovery towards recent highs.
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I write about the forces shaping business and the global economy, from startup growth and changing markets to international trade and policy. My work focuses on breaking down complex developments into clear, practical insights and understanding what they could mean for businesses, investors, and the wider economy.
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