Gold prices continue to languish with a bearish bias, according to Manav Modi, Senior Analyst, Commodity Research at Motilal Oswal Financial Services Ltd. Escalating geopolitical tensions in the Middle East — particularly fresh US strikes on Iranian targets following attacks on commercial vessels near the Strait of Hormuz — have pushed crude oil prices higher, reviving fears of energy-driven inflation and adding uncertainty over global supply routes.
Geopolitical and Macroeconomic Drivers
The rise in oil prices has supported the US dollar and Treasury yields, weighing on gold. Meanwhile, the minutes of the Federal Reserve's June meeting highlighted that policymakers remain divided on the need for further policy tightening but broadly acknowledged persistent inflation risks arising from elevated energy prices, AI-driven investment demand and the impact of tariffs. As a result, markets continue to price in the possibility of another Fed rate hike before the end of the year if inflation remains sticky, according to the source.
Technical Analysis and Key Levels
Gold continues to trade with a bearish bias after extending its sequence of lower highs and lower lows on the daily chart. Prices remain below the 20-day moving average, indicating that sellers dominate in the near term. The 20-day moving average (middle Bollinger Band) is placed at Rs 145,806, while the upper band stands at Rs 152,446 and the lower band at Rs 139,166. Gold is currently trading below the middle band and gradually approaching the lower band, reflecting weakening momentum.
Fibonacci retracement drawn from the recent major swing low near Rs 118,000 to the record high around Rs 179,000 places key levels as shown below:
| Fibonacci Level | Price (Rs) |
|---|---|
| 23.6% | 164,600 |
| 38.2% | 155,700 |
| 50% | 148,500 |
| 61.8% | 141,300 |
Gold is currently trading around the 61.8% retracement at Rs 141,300, a level often regarded as the final line of support before a deeper correction. Holding above this zone could encourage bargain buying, whereas a decisive break below it may expose prices towards Rs 138,500–137,000.
Support and resistance levels are:
- Immediate support: Rs 141,300, followed by Rs 139,200 (lower Bollinger Band) and Rs 137,000.
- Resistance: Rs 145,800 (first), Rs 148,500 (50% Fibonacci), and Rs 152,450 (upper Bollinger Band).
Upcoming Data Releases and Outlook
Investor attention will now turn to this week's key US economic releases, particularly the Consumer Price Index (CPI) and Producer Price Index (PPI), along with Federal Reserve Chair Kevin Warsh's congressional testimony, for further clarity on the inflation outlook and the future path of interest rates. Stronger-than-expected inflation data could reinforce expectations of higher-for-longer interest rates and weigh further on bullion, while softer inflation readings or dovish policy signals may provide some relief to gold prices.
Overall, the outlook remains bearish to neutral, with the Rs 141,300 support zone likely to determine whether gold stages a recovery or extends its corrective decline during the week. From the perspective of commodity traders and analysts, the interplay between geopolitical developments, energy prices, and Fed policy will be critical. A sustained close above Rs 145,800 would indicate improving sentiment and could pave the way towards the upper Bollinger Band, while a break below Rs 139,200 may accelerate downside momentum.
Sources:
