The festive season is here, and with the wedding season also underway, many families are looking to buy gold for jewellery, gifts and investment. The recent movement in gold prices below the Rs 1.5 lakh mark on the Multi Commodity Exchange (MCX) may offer some relief to buyers, but the big question is whether prices will fall further or start climbing again.
At 1 pm on Tuesday, MCX gold was trading at Rs 1,49,621 per 10 grams, up 0.05%. MCX silver was priced at Rs 2,22,950 per kg, rising 0.03%.
While the gains were modest, gold prices remain sensitive to developments in the global economy, particularly US inflation data and expectations of interest rate changes by the Federal Reserve. These factors could determine whether buyers get another opportunity to purchase gold at lower levels or need to prepare for a fresh rise.
Gold prices have been influenced by changing expectations around US interest rates, geopolitical tensions and movements in crude oil prices. Investors are closely watching the upcoming US inflation data for clues about the Federal Reserve’s next move.
Dr Renisha Chainani, Chief Research Officer at Augmont, said gold and silver prices remained supported as oil prices eased, although the market’s main focus was on the upcoming US inflation reading and what it could mean for interest rates.
Traders are weighing the likelihood of interest rate changes in the US. According to Chainani, market expectations reflected a 19% chance of a rate hike in October and an 85% probability of an increase in December, based on the CME FedWatch tool.
The relationship between gold and interest rates is important for buyers to understand. Gold does not pay interest, unlike certain bonds and deposits. When interest rates rise, investors may prefer assets that offer returns, reducing the appeal of gold.
Geopolitical tensions in the Middle East have also pushed crude oil prices higher at times, raising concerns about inflation. While gold is often considered a hedge against inflation and uncertainty, higher interest rate expectations can weigh on its price.
The next major trigger for gold could be the US Consumer Price Index (CPI) data. A higher-than-expected reading, particularly for core inflation, could strengthen expectations of an interest rate hike and put pressure on gold prices.
Chainani said a hotter inflation reading could increase the likelihood of an October rate hike, potentially sending gold lower again.
She suggested that buyers and traders watch the following price levels closely.
For gold, Chainani identified a buying range of $4,060–$4,100, equivalent to around Rs 1,48,000–Rs 1,49,000, with a stop-loss below $4,000. She said a daily close above $4,300 could signal that the correction had ended and open the way towards $4,400. A hotter US inflation reading, however, could bring another test of the $4,000 level.
These are technical trading levels rather than guaranteed price targets. Actual prices in India can also be affected by currency movements, import costs and local premiums.
Ponmudi R, CEO of Enrich Money, said MCX gold opened at Rs 1,49,653 and was trading near Rs 1,49,519, down 0.02% at the time of his assessment, even as international gold prices were firmer.
He said that the contract remained below the resistance range of Rs 1,50,000–Rs 1,50,700.
According to Ponmudi, the immediate resistance for MCX gold is at Rs 1,50,000–Rs 1,50,700, followed by Rs 1,52,000–Rs 1,52,600. On the downside, support is at Rs 1,47,300–Rs 1,48,000, with another support range at Rs 1,45,300–Rs 1,46,000.
In simple terms, resistance is a price range where gold may struggle to rise further, while support is a level where buying interest could emerge and limit a fall.
Ponmudi also pointed to technical indicators suggesting some improvement in momentum. The Relative Strength Index (RSI) was at 45.49, above its signal line, while the Moving Average Convergence Divergence (MACD) histogram had just turned positive.
However, MCX gold was holding up better than MCX silver, which was down 0.28% in his assessment, even as both metals lagged their international counterparts.
For buyers planning purchases for weddings or the festive season, the decision depends on when they need the gold and how much price risk they are willing to take.
If you need gold for a wedding or a festive occasion soon, waiting for a large correction could be risky. Prices may fall further, but they could also rise if global uncertainty increases or expectations around interest rates change. Buying in stages rather than making the entire purchase at once can help spread the risk of buying at an unfavourable price.
If you are buying gold as an investment, it may be worth watching the US inflation data and the MCX support levels before making a decision. Chainani’s suggested buying range of Rs 1,48,000–Rs 1,49,000 offers a technical reference point, but it is not a guarantee that prices will fall to that level or rise afterwards.
If you are buying jewellery, remember that the final bill is not determined by the gold price alone. Making charges, wastage charges where applicable, and GST can add to the cost. Buyers should compare the final price across jewellers, check the purity and hallmarking, and understand the buyback terms before making a purchase.
For silver buyers, Chainani suggested that short-term traders could consider buying near Rs 2,21,000–Rs 2,22,000, with a stop-loss below Rs 2,15,800 and a target of Rs 2,29,000. She cautioned that a clear break below Rs 2,19,800 would turn the near-term outlook bearish. These levels are intended for short-term trading, not as a recommendation for every retail buyer.
In other words, gold hovering below Rs 1.5 lakh per 10 grams may look like an opportunity for families preparing for weddings and festive celebrations. However, a sustained fall is not assured, and the upcoming US inflation data could change market expectations quickly.
For those who need jewellery soon, spreading purchases across different dates may be more practical than trying to predict the exact bottom. Those buying for investment can keep an eye on global interest rate expectations and key MCX price levels before committing a large sum.
Ultimately, the right time to buy depends on your purpose. Jewellery buyers should focus on their needs and the final cost, while investors should consider their time horizon, risk appetite and the role gold plays in their overall portfolio.