Gold prices are seeing positive momentum, and while volatile, the near-term outlook remains optimistic, according to Vedika Narvekar, Research Analyst - Commodities & Currencies at Anand Rathi Shares and Stock Brokers. Spot gold gained around 0.7% last week and extended the move above $4,400 at the start of this week, briefly testing the $4,450 mark, before Tuesday's global bond selloff pulled prices back toward $4,340-4,360, the report said. The broader trend, however, remains positive.
What is driving gold higher
The rally has been supported by softer US inflation and retail-sales data, which reduced expectations of a September Fed hike, alongside a weaker dollar and renewed investor demand, according to the report. Rising concerns over fiscal sustainability, bond-market volatility and geopolitical uncertainty are strengthening gold's diversification appeal.
The key counterweight remains higher oil prices and the unresolved US-Iran/Hormuz situation, which could keep inflation expectations elevated and limit the Fed's ability to ease, the report said.
ETF inflows and central-bank buying
Global gold ETFs added about $3 billion in July, reversing two months of outflows, while holdings increased by 39 tonnes year-to-date, the report said. August flows have also remained positive. Central-bank demand continues to provide a strong floor, with China extending its gold-buying streak to 21 consecutive months.
This week's key catalysts
The immediate trigger is the Fed's July meeting minutes, followed by Fed Chair Kevin Warsh's comments at Jackson Hole next week. Markets are currently pricing roughly a 65% probability of a September hold versus 35% for a hike, so any shift in the Fed's tone could quickly move yields, the dollar and gold. At the same time, oil remaining above $85 and uncertainty around the Strait of Hormuz could keep inflation risks intact, creating a tug-of-war between safe-haven demand and higher-rate expectations.
Technical levels and near-term outlook
The near-term bias remains positive but volatile. Fundamentally, ETF inflows, central-bank buying and softer US data are keeping the medium-term setup constructive, while geopolitical and fiscal risks add another layer of support. Technically, gold holding above $4,290 keeps the rebound intact, with $4,450 the immediate breakout trigger and $4,550 the next psychological/technical hurdle.
| Instrument / Location | Support | Resistance |
|---|---|---|
| Gold spot (USD/oz), CMP $4,350 | $4,290 / $4,200 | $4,450 / $4,550 |
| Gold (INR) | Rs 1,51,900 / Rs 1,49,200 | Rs 1,57,400 / Rs 1,60,900 |
| Additional USD levels | $61.50 / $59.50 | $65.50 / $67.50 |
| Additional INR levels | Rs 2,23,900 / Rs 2,16,500 | Rs 2,38,400 / Rs 2,45,700 |
The report also lists additional technical levels at $61.50/$59.50 support and $65.50/$67.50 resistance in USD, with corresponding INR levels at Rs 2,23,900/Rs 2,16,500 and Rs 2,38,400/Rs 2,45,700.
For traders, the report's key levels frame the near-term direction: a sustained move above $4,450 opens the $4,550 hurdle, while a break of $4,290 would put the rebound at risk. The July Fed minutes, Jackson Hole commentary from Warsh and the September Fed decision are the scheduled catalysts that will determine whether gold's positive bias holds or gives way to renewed volatility, according to the report.
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