Gold at Rs 1.47 lakh: Will prices rise further or stay around here?

Gold prices are sitting close to the Rs 1.47 lakh mark, but the next move is not so easy to call. While a firm dollar and high US bond yields are putting pressure on the yellow metal, safe-haven demand is offering some support.At the time of writing on Thursday, around 12.25 pm, MCX gold was trading at Rs 1,47,840, up 1.18%. With several global factors pulling prices in different directions, investors could see more movement before gold finds a clear direction.WHY GOLD IS STRUGGLING TO MOVE HIGHEROne of the biggest factors weighing on gold is the rise in US Treasury yields. When bond yields are high, gold can become less attractive compared with interest-bearing assets.A stronger US dollar is another headwind for bullion prices. Ponmudi R, CEO of Enrich Money, said gold is currently consolidating near recent lows as these factors weigh on the precious metal.“Gold continues to consolidate near recent lows as elevated Treasury yields and a firm dollar, supported by expectations of a hawkish Federal Reserve rate path, weigh on bullion. Safe-haven and central-bank demand continue to provide some underlying support,” he said. In simple terms, gold is facing pressure from higher yields and the dollar, but demand from central banks and investors looking for a safe asset is helping limit the downside.US INFLATION DATA GAVE GOLD SOME SUPPORTGold did get a brief boost from softer-than-expected US inflation data. Lower inflation reduced expectations of an October rate hike by the US Federal Reserve, which initially supported bullion.However, the recovery did not last.Pinky Yadav, Commodity Fundamental Analyst at Choice Broking, said rising oil prices, higher Treasury yields and a stronger dollar offset the support from the softer inflation reading.“Bullion prices fell on MCX as rising oil prices, surging Treasury yields, and a 14-week high Dollar Index offset support from softer-than-expected US inflation data,” she said.“While lower inflation reduced bets on an October Fed rate hike and briefly lifted gold, the rally faded,” Yadav added.WILL GOLD PRICES RISE OR REMAIN FLAT?For investors, the near-term picture appears more balanced than one-sided. Gold has support from safe-haven and central-bank demand, but the dollar, Treasury yields and expectations around US interest rates could continue to cap sharp gains.This means investors should be prepared for continued consolidation and volatility rather than assume that gold will immediately resume a strong upward move.The next major trigger could be US economic data, particularly the September nonfarm payrolls report. The numbers could influence expectations about the Federal Reserve's rate path and, in turn, gold prices.A weaker US jobs reading could strengthen expectations of easier monetary policy, potentially supporting gold. On the other hand, stronger employment data could reinforce expectations of higher interest rates for longer and put pressure on bullion.GEOPOLITICAL UNCERTAINTY COULD OFFER SUPPORTApart from economic data, geopolitical developments remain another factor to watch.Yadav said investors are also monitoring developments involving Iran after it received a US response regarding a Gulf ceasefire proposal. Any increase in uncertainty could support demand for gold as a safe-haven asset.However, geopolitical developments can change quickly, so their impact on prices may not be sustained unless broader market concerns persist.WHAT SHOULD INVESTORS EXPECT?With gold trading around Rs 1.47 lakh, investors should watch three key factors — US interest-rate expectations, the dollar and Treasury yields. Safe-haven demand and central-bank buying could provide support, while stronger yields and a firm dollar could keep prices under pressure.So, rather than expecting a straight-line rise or a sharp fall, investors may need to brace for a period of choppy trading around current levels, with the next major move likely to depend on incoming US economic data and global developments.For those already holding gold, the immediate focus could be on how these factors evolve rather than reacting to every short-term price movement.(Disclaimer: The views, opinions, recommendations, and suggestions expressed by experts/brokerages in this article are their own and do not reflect the views of the India Today Group. It is advisable to consult a qualified broker or financial advisor before making any actual investment or trading choices.)- Ends