Gold slips towards Rs 1.46 lakh: Will the fall continue from here?

Gold prices are under pressure, and investors are once again watching the yellow metal closely. A stronger US dollar, rising bond yields and uncertainty over interest rates are weighing on gold, even as tensions in the Middle East continue to keep markets on edge.At the time of writing, around 12.47 pm, MCX gold was trading at Rs 1,46,580, down 0.15%. International gold prices have also remained under pressure, with investors waiting for a fresh batch of US economic data that could influence the Federal Reserve's interest rate outlook.So, is this just a temporary dip, or could gold prices fall further from here?WHY ARE GOLD PRICES UNDER PRESSURE?Gold tends to come under pressure when US bond yields and the dollar rise, as the precious metal becomes less attractive compared with interest-bearing assets. Dr Renisha Chainani, Chief Research Officer (CRO) at Augmont, said the market has been assessing the impact of the Federal Reserve's rate decision, while movements in crude oil and geopolitical tensions have added to inflation concerns.“The Fed lifted rates to 3.75%-4.00% on 16 September, its first hike in three years, and markets spent the whole week digesting it,” Chainani said. She added that the US-Iran standoff around the Strait of Hormuz has also remained a key factor for markets, but has not necessarily supported gold.“Brent crude swung above $100 and WTI hovered around $92, and each oil spike fed inflation worries, higher yields and a firmer dollar,” she said.According to Chainani, higher oil prices and inflation concerns could keep yields elevated, which may put further pressure on gold.US DATA COULD DECIDE THE NEXT MOVEThe focus is now shifting to a series of important US economic data releases.These include job openings, the ADP employment report, the PCE price index and non-farm payrolls. The numbers will give investors more clues about the strength of the US economy and the likely direction of interest rates.“Stronger-than-expected readings could keep yields under upward pressure and weigh further on gold,” Chainani said.She added that the near-term direction of gold would also depend on US inflation data, comments from Fed officials and developments in the Iran talks.GOLD IS NEAR A KEY SUPPORT ZONEAamir Makda, Commodity & Currency Analyst, Technical Research, Choice Broking, said gold has started the day on a flat note and remains close to its lowest level in around seven weeks.“Gold price has resumed on a flat note today, trailing around the lowest level of past seven weeks on the concerns over interest rates hike speculations ahead of US economic data in this week,” Makda said.He said Comex gold had recovered from a support level of $4,110 in recent sessions and was trading around $4,140 an ounce.According to Makda, a stronger US dollar and rising bond yields could continue to weigh on gold. Higher oil prices and Middle East tensions are also adding to concerns about inflation.For MCX gold, he identified support at Rs 1,48,380 and Rs 1,47,950, while resistance is at Rs 1,49,500.WILL GOLD PRICES FALL FURTHER?The possibility of further weakness cannot be ruled out, particularly if upcoming US economic data comes in stronger than expected and pushes bond yields and the dollar higher.Chainani said stronger-than-expected US data could put further pressure on gold. Makda also pointed to the importance of the support levels as investors assess the next move.However, the outlook is not one-way. Gold prices can react quickly to changes in interest-rate expectations, inflation data and geopolitical developments.For investors, this means a short-term decline does not necessarily settle the longer-term direction of gold. Instead, the coming US data and central bank signals could be important triggers for the next major move.WHAT SHOULD INVESTORS DO NOW?For investors who already hold gold as part of a diversified portfolio, the current decline may not necessarily call for a knee-jerk decision to sell. Gold can play a role as a diversification asset, but short-term price movements can be volatile.Those looking to invest fresh money may want to avoid making a large one-time bet based only on a day's price movement. Staggering purchases can help reduce the risk of entering the market at an unfavourable level.Investors should also keep an eye on the dollar, US bond yields, inflation data and Fed commentary, as these are among the factors currently driving gold prices.The key levels highlighted by Makda can also help investors track the technical trend. A sustained move above the resistance level could signal improving momentum, while a break below key support levels could point to further weakness.For now, gold remains caught between two forces: pressure from higher yields and a stronger dollar on one side, and inflation and geopolitical uncertainty on the other. The next few US economic data releases could provide a clearer signal on which factor takes control.(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