Gold Rally Takes a Breather after Surpassing Rs 1 Lakh: Here's What Analysts Say

Gold prices cooled off after hitting a record rally to the Rs 1 lakh mark, as tensions around the US-China trade war eased slightly. While the price of the yellow metal took a sharp hit on the MCX on Thursday following a gap-up opening, the downtrend continued on Friday, albeit at a slower pace. The rate of 24-carat gold (per 10 grams) stood at Rs 98,340 price level in the Delhi NCR region, as per GoodReturns.

However, gold is expected to remain volatile in the upcoming days as uncertainty over trade policies continues to dominate the overall outlook of the yellow metal. Analysts believe that the delay in diplomatic progress, coupled with uncertainty around China’s official response, continues to keep risk sentiment elevated.

"Notably, China has yet to issue a strong or clear stance on the trade discussions, which adds to the geopolitical fog. Given the lack of clarity and persistent tariff-driven tension, gold is likely to remain highly volatile," said Jateen Trivedi, VP Research Analyst - commodity and currency, LKP Securities.

On year-to-date basis, the yellow commodity has already surged over 26%, surpassing the returns of every other asset class, especially equities. This has also pushed investors to bet on the yellow commodity as it is considered a safe haven asset as well. Meanwhile, central banks around the world are also ramping up their gold purchases.

Key Ranges

As per Trivedi, price action between Rs 94,000–Rs 97,000 in MCX can be expected over the next two sessions, offering trading opportunities on both long and short sides. The directional trend will remain data- and headline-sensitive.

However, the same uncertainty is causing heightened confusion around currencies and bond yields as well. This is also helping in keeping the gold outlook strong in the foreseeable future. "We believe all dips will invite buying by ETFs and central banks and this trend is unlikely to reverse near term and therefore gold will maintain its upward trajectory," said Sandip Raichura, CEO - retail broking and distribution, director - PL broking and distribution.