Gold’s recent weakness stems from a sharp uptick in crude oil prices this year, raising inflation fears around the world. The war has pushed the Federal Reserve’s rate cut chances further back from an estimated two downward revisions in 2026 to a likely single cut of 25 bps.
While gold prices have been falling globally, even a sharp slide in the rupee versus the US dollar has failed to provide support. The June futures are down by Rs 55,000 per 10 gram (27%) from the lifetime high of Rs 2,02,984.
“Gold has stabilised after the recent sharp correction and is now showing early signs of base formation near Rs 1,46,000 to Rs 1,47,000 zone. The broader trend remains fragile, but short-term structure indicates pullback recovery potential, supported by ongoing geopolitical uncertainty between US, Israel and Iran, despite intermittent de-escalation signals,” Jateen Trivedi, Vice President, Research Analyst at LKP Securities said.
Despite the ongoing weakness, Trivedi said gold remains influenced by mixed geopolitical signals with escalation supporting the safe-haven demand, though inflation concerns keep rate cuts uncertain.
In his view, the mixed signals will allow only a controlled recovery rather than a strong breakout environment.
4 triggers to watch out for:
1) Key support & resistance Price has formed a short-term bottoming structure after sustained selling pressure and is attempting to hold above recent lows.
The immediate support is seen at Rs 1,47,000 while major support lies at Rs 1,45,000. The immediate resistance is at Rs 1,49,000 and major resistance is at Rs 1,50,000. Holding above Rs 1,45,000 keeps rebound possibility intact, Trivedi added.
2) Momentum indicators RSI is near 40, recovering from oversold territory. This indicates selling pressure has eased, and a gradual momentum recovery is underway, though not yet strongly bullish. Price is moving from the lower band toward the middle band, indicating volatility contraction after expansion. This setup generally supports mean reversion toward Rs 1,49,000 to Rs 1,50,000 zone.
3) Moving averages EMA 8: Flattening, showing slowing downside momentum. EMA 21: Still downward sloping, acting as resistance near Rs 1,49,000.
Price attempting to reclaim EMA 8 is an early sign of reversal, but confirmation requires sustained move above EMA 21.
4) MACD MACD remains in negative territory but is showing signs of bottoming out, indicating bearish momentum is fading. A crossover may support short-term upside.
Gold trading strategy A buy-on-dip strategy is recommended around the buy zone of Rs 1,47,000 with a stop loss of Rs 1,45,000 and a target of Rs 1,50,000.
Gold is likely to see short-term recovery from oversold levels, with dips toward Rs 1,47,000 attracting buying interest, while Rs 1,50,000 remains a key resistance to watch.
(Disclaimer: The recommendations, suggestions, views, and opinions given by the experts are their own. These do not represent the views of The Economic Times.)