Gold Prices
Gold may fall more near term but fundamentals remain bullish, say analysts
This story was originally published at 18:29 IST on 24 October 2025
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By Ashutosh Pati
MUMBAI – After a historic rally spanning over nine weeks, gold prices are finally consolidating and are poised to end the week in the red as investors book profits. Analysts believe there is "more room on the downside" for gold in the near term but remain bullish in a medium term view.
On Tuesday, gold recorded its biggest daily fall of nearly 6% in several years, followed by a fall on Wednesday as well. Even though prices recovered a little Thursday after the US announced sanctions on Russia's largest oil companies, they are again trading in the red Friday. A break below $4,050 per ounce on COMEX could pull prices further down towards $4,000 and $3,850 per ounce, Manav Modi, assistant vice president at Motilal Oswal Financial Services Ltd., said.
Apart from profit-taking, a firmer dollar and a rally in equities is also taking away liquidity from gold, analysts said. Moreover, lower physical demand from India after Diwali has also played a role in the recent correction. "...three consecutive and unsuccessful attempts in gold to break above USD 4,380 probably helped change the mindset from looking for more gains to protect those that had already been achieved," Ole Hansen, head of commodity strategy at Saxo Bank, said in a note.
At 1602 IST, the most-active December gold contract on COMEX was 1.6% lower at $4,078.1 per ounce and the same month contract on the Multi Commodity Exchange of India was at INR 121,964 per 10 grams, down 1.7% from the previous close.
On the domestic bourse, immediate support for gold is between INR 116,000 per 10 grams and INR 118,000 per 10 grams, Modi said. There's been a shift in liquidity from gold as domestic equities are also performing well, Modi added.
Gold prices are likely to be range-bound between $3,800 per ounce and $4,400 per ounce in the next two to three months, Anindya Banerjee, senior vice president for commodity and currency at Kotak Securities, said. Prices in India are likely to be between INR 119,000 per 10 grams and INR 126,000 per 10 grams in the near term, Banerjee said.
On the COMEX, gold futures currently face immediate resistance near $4,150–$4,190 per ounce, where previous rallies have encountered selling pressure, Riya Singh, research analyst, commodities and currency at Emkay Global Financial Services, said.
Support is seen at $4,000–$3,980 per ounce, followed by a deeper cushion near $3,880-$3500 per ounce if weakness persists, Singh said. A decisive close above $4,212 per ounce could re-establish bullish momentum toward $4,350–$4,400 per ounce in the medium term, she said.
On the MCX, the resistance is seen around INR 123,000 per 10 grams and INR 123,500 per 10 grams, and strong support at INR 120,000 per 10 grams, Singh added. A sustained move above INR 123,500 could open the path toward INR 125,000-INR 127,000 in the coming weeks, whereas a breakdown below INR 120,000 may invite further technical selling toward INR 118,200-INR 116,000 per 10 grams.
Despite the pullback, the fundamentals such as rate cut expectations by the US Federal Reserve, uncertainties around tariffs, the independence of the Fed, and purchases of the metal by global central banks remain in place and will support prices over the next one year, analysts said.
"Persistent fiscal imbalances in the US, expanding government debt, and expectations of a rate cut cycle continue to provide strong fundamental support," Singh said. "Moreover, central bank diversification away from the dollar and ongoing geopolitical risks are likely to underpin investor demand." End
US$1 = INR 87.84
IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT
Edited by Ashish Shirke
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