Gold price prediction today: Gold prices are seeing positive momentum, and while silver has outperformed gold so far this August, the profit taking risk is rising, says Vedika Narvekar, Research Analyst – Commodities & Currencies, Anand Rathi Shares and Stock Brokers.Gold finally broke out of its long consolidation range last week, gaining over 7%, its strongest weekly rise since January. The rally has continued this week, with gold now up around 8.7% this month and trading near $4,400/oz. The move is supported by a weaker dollar, falling expectations of a September Fed rate hike, renewed ETF buying and continued central-bank and Chinese demand.What makes this rally more encouraging is that investors are now joining central banks. Global gold ETF holdings added another 22 tonnes in the week ended August 7, while China’s central bank extended its buying streak to 21 months, adding around 640,000 ounces in July. Meanwhile, weak US jobs data pushed September Fed-hike odds down to around 44% from 55%. In simple terms, gold now has support from both fundamentals and fresh investor money, making the recent breakout look more convincing than earlier attempts.
Key Focus This Week
US CPI is the key trigger this week. July CPI is expected at around 3.4% YoY. A softer number could further support gold, while a hotter print could revive Fed-hike bets. On the technical front, $4,400 is the key hurdle as of now for the rally to continue while $4,200 is the strong support: Holding above this level keeps the breakout intact.
Gold Price Outlook
The overall setup remains positive. Central-bank buying, improving ETF flows, strong Chinese demand, a softer dollar and lower Fed-hike expectations are supporting gold. The immediate risk is a hotter US inflation number or a renewed rise in oil prices, which could push yields and the dollar higher. Technically, prices are near the breakout level of $4,400 with $4,490/$4580 as the next upside level. As long as gold holds above $4,200, we would maintain a positive view.Technical Levels & Near-Term OutlookGold (Spot) CMP: $4,400/oz
- Support: $4,290 / $4,200
- Resistance: $4,500 / $4,580
MCX Gold CMP: Rs 1,54,600
- Support: Rs 1,50,800/ Rs 1,47,600
- Resistance: Rs 1,57,600/ Rs 1,60,900
Silver’s Strong rally, but watch for some cooling
Silver has significantly outperformed gold, gaining around 13% in August, compared with roughly 9% for gold, reflecting its higher-beta characteristics. The gold-silver ratio has fallen to around 67, with the near-term possibility of moving towards 64. However, silver now appears increasingly stretched relative to gold. Current correlations suggest the metal is trading at a premium of roughly $9/oz to levels implied by gold. While the broader trend remains positive, the sharp outperformance means near-term upside could become more limited and profit-taking risk is rising.International Silver CMP: $65.30/oz
- Support: $62.50 / $61
- Resistance: $67.50/ $70.50
MCX Silver CMP: Rs 2,37,400 (Sept contract)
- Support: Rs 2,27,200/ Rs 2,21,700
- Resistance: Rs 2,45,400 / Rs 2,56,300
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