Gold prices are expected to witness further consolidation in the coming week as investors brace for a slew of events, ranging from central bank meetings, including the US Federal Open Market Committee (FOMC) meeting's outcome, to global trade negotiations, analysts said.
Traders will also closely watch macroeconomic data, including Personal Consumption Expenditures (PCE) inflation numbers, employment data from the US, manufacturing PMI numbers from across regions and developments related to the August 1 trade deal deadline.
August 1 marks the end of the suspension period of Trump tariffs imposed on dozens of countries, including India.
Pranav Mer, Vice President, EBG - Commodity & Currency Research, JM Financial Services, said, "Gold prices may see some consolidation in the week ahead as the focus will be on the outcome of trade negotiations between the US-Euro zone and the US-China along the policy meeting of the US Federal Reserve and Bank of Japan, both of them expected to keep interest rates on hold.
"However, their official commentary will be closely watched," Mer said, adding that the Fed remains under pressure to cut interest rates, and the Bank of Japan is being tracked for potential hikes.
On the domestic front, gold futures for October delivery corrected from a recent high of Rs 1,01,543 to Rs 98,764 per 10 grams, down by 2.74 per cent on the Multi Commodity Exchange (MCX).
Prathamesh Mallya, DVP - Research, Non-Agri Commodities and Currencies at Angel One, said, the rally in gold prices took a breather due to a combination of factors including ease of safe-haven demand, profit taking following recent highs, and optimism about global trade deals especially between the US-Japan, and the US-EU talks.
"Gold prices have had a good ride in July; however, the correction was driven by lower safe-haven demand and expectations of a breakthrough in trade deals," he said.
Mallya expects that precious metal prices to remain under pressure and added that the US GDP data will also play a critical role in shaping gold's trajectory in the short term.
Jateen Trivedi, VP Research Analyst, Commodity and Currency at LKP Securities, said that volatility in the rupee owing to tariff-related uncertainties may offer limited support to the bullion prices in the domestic market.
On the global front, Comex gold futures for August delivery slipped by USD 37.90 or 1.12 per cent to close at USD 3,335.60 per ounce in New York.
N S Ramaswamy, Head of Commodity & CRM, Ventura, said gold saw a sharp drop from USD 3,438 to USD 3,335.60 per ounce amid an extended tariff truce between the US and China, which has added to this sentiment.
Gold may stay weak as hopes of more trade deals or tariff delays before the August 1 deadline, Ramaswamy stated.
"Safe haven demand seems to have vanished and has lifted the US stocks and Treasury yields, buoyed by strong AI-linked corporate earnings and risk-on appetite. The next move in gold will depend on whether the US Fed signals a more dovish stance or if tensions flare again on the tariff front," he said.
Ramaswamy added that a possible resumption of Chinese central bank gold buying could offer support later in 2025, but for now, the market may remain in a phase of consolidation.
