Gold and silver prices are expected to remain range-bound this week as investors await a series of key global economic indicators, with MCX gold projected to trade in the ₹1.40-1.44 lakh per 10 grams range in the near-term. According to Jateen Trivedi, VP Research Analyst at LKP Securities, the directional move will hinge on US macroeconomic data and evolving expectations around the Fed's policy path. On the domestic front, gold futures for August delivery fell by ₹1,595, or 1.1%, during the last week to close at ₹1.41 lakh per 10 grams, while silver futures for September contract declined ₹4,940, or 2.2%, to settle at ₹2.17 lakh per kilogram on the Multi Commodity Exchange. Despite a weaker US dollar and sharp correction in crude oil prices, gold failed to attract strong buying interest, reflecting a cautious approach among investors.
Motilal Oswal Financial Services (MOFSL) analyst Manav Modi projects gold could reach $5,500-$5,600 by year-end despite current volatility, with prices consolidating in the $4,000-$4,500 range until festive season demand picks up. According to MOFSL's latest analysis, gold currently trades near $4,056, representing a 28% decline from its January record high of $5,598. Modi expects the current pain to continue for the next one-two months until clarity emerges on US-Iran tensions or interest rate trajectory. The Federal Open Market Committee (FOMC) is set to announce its rate decision on Wednesday, July 29, with CME FedWatch data showing a 64.2% probability of maintaining rates at 350 to 375 basis points, though traders still price a 35.8% chance of a hike to 375 to 400 basis points.
Investors will monitor purchasing managers' index (PMI) data from the US, UK, Eurozone and Japan, with focus remaining on July employment data from the US, comprising non-farm payrolls and the unemployment rate. According to LKP Securities analysis, uncertainty over the Federal Reserve's interest rate outlook remained the key factor weighing on bullion, as policymakers have yet to provide a clear timeline for future policy moves. Market participants will also track speeches by Federal Reserve officials Lisa D Cook and Thomas Barkin, as well as China's trade data, including exports, imports, Consumer Price Index and Producer Price Index, for additional cues on the global economic outlook and bullion prices. In international markets, Comex gold futures for October delivery settled at $4,076.6 per ounce, while silver for September contract dropped nearly 2% to close at $57.78 per ounce in New York. Additionally, developments related to the US-Iran conflict and the stability of crude oil supplies through key shipping routes will also influence market sentiment.
The weekly structure confirms gold's bear market status, with the price losing the 0.382 Fibonacci retracement zone between $4,300 and $4,400 in June. According to technical analysis, gold currently sits on the 0.5 retracement at $3,943, inside the $3,900 to $4,000 support zone. The weekly Relative Strength Index (RSI) has broken its ascending support line from September 2022 in early June and now reads 37, its lowest level since late 2023. The Bollinger Band Width Percentile (BBWP) shows volatility fading into a squeeze, historically preceding an expansion move in either direction. The intraday dip to $4,011.10 during Tuesday's New York session represented a genuine probe of market depth, with prices recovering without catastrophic follow-through selling. This confirms that demand exists at these levels, though it does not guarantee the floor will hold indefinitely.
MOFSL analysts project silver could reach $75-$85 on a medium-to-long term basis, with immediate upside potential to $65 if current support levels hold. Silver is currently trading near $57.14 per ounce, having declined 2.7% during recent sessions. The analysts recommend an allocation of 60-70% to gold and 30-40% to silver for long-term investors, representing a shift from their previous heavy silver stance. Modi notes that while both metals serve different purposes, gold's weightage should be higher in portfolios despite silver's industrial applications. For gold, downside targets include $3,950-$3,900 if the $4,000 support fails, with the next major support at the 0.618 golden pocket near $3,552. The gold-silver ratio continues to measure how many ounces of silver are required to purchase one ounce of gold, with a rising ratio during precious metals decline indicating silver underperformance.
