Gold price prediction today: Gold prices may rise in the short-term but the upside is likely to be capped, says Praveen Singh, Head Currencies and Commodities, Mirae Asset ShareKhan. Let’s take a look:
Gold Performance:
On October 12, spot gold surrendered its gains made in the Asian session to slide lower as the day wore on as oil prices and Dollar Index strengthened.At the time of writing this article on the night of October 12, spot gold was changing hands at $4165, down nearly 0.7% for the day. Losses in domestic gold prices were more pronounced, down 1.3%, due to strong appreciation in the INR on significant steps taken by the RBI to support the ailing currency in the weekend.In the week ending October 9, the shiny metal closed with a weekly gain of 1.2% at $4194, though return of Chinese buyers after a week-long ‘golden week holiday’ helped the metal cushion its losses.
Geopolitics and oil:
A weekend attack on Saudi’s Riyadh Airport on Saturday left 12 people dead, including an American, and over 300 injured. Saudi Arabia said it was dealing with missiles and drone attacks Monday also. The US President Trump said he is weighing joining war against the Houthis.The conflict between the Houthis and Yemen’s internationally recognised government, backed by Saudi Arabia, has intensified regional geopolitical tensions. Houthi attacks on Riyadh and the resulting aviation disruptions have affected the ongoing World Petroleum Congress, prompting several senior oil executives to withdraw from in-person participation, although the event is proceeding as planned. Attention will subsequently shift to the Future Investment Initiative, Crown Prince Mohammed bin Salman’s flagship investment conference, scheduled for October 26-29. Given the prominence of these events and continued Houthi warnings concerning Saudi airspace, the risk of further attacks is likely to remain elevated.Trump’s announcement of an energy ceasefire between Russia and Ukraine does not seem to be holding.Trump, through a social media post claimed that Russia has agreed to sell US diesel to the tune of 4.8 million tons in the coming months. Russia has not specified either dates or volumes. The initial tranche of 5,00,000 tons (125,000 bpd if spread across November) will be less than 10% of the diesel loss of 1.6 mbpd. The US consumes around 3.5-4 mb diesel/day. Even 4.8 million tons, promised to be delivered by the start of the next year, amount to merely 36 mb, well short of the US consumption.At the time of writing, Brent oil futures were trading with a daily gain of 2% at $106.75.
Data roundup:
Friday’s US data showed that University of Michigan sentiment fell from 48.1 in September to 46.30 (forecast 47.60), lowest since May, in its October preliminary reading. One-year inflation expectations rose from 4.6% to 4.7%, while five-ten-year expectations edged higher from 3.4% to 3.5%. Current conditions slumped sharply from 50.90 to 44.70 (forecast 50.10), a record low.NY Fed one-year consumers’ inflation expectations rose to 3.90% in September — the highest since May 2023.The US trade deficit in August increased to its highest level since March 2025 as imports hit a record high of $420.80 billion.
Currencies and yields:
Indian Rupee strengthened Monday as the RBI took extraordinary measures on October 10 to support the ailing domestic currency. These steps include to open a special window to meet state-run oil companies’ requirements, asking banks to park cash with the RBI for some forex transactions (equivalent of 20% of the notional amount of each derivative transaction exceeding $2 million), prohibiting dealers from re-booking cancelled forex derivatives involving the INR, and reduction in limits for forex derivative transactions without confirmed existence of the underlying assets to $5 million from $100 million.The US Dollar Index edged higher Monday as crude oil prices rose. The Index, at the time of writing, was hovering around 102.51, up nearly 0.25% for the day, as it approached the cycle high of 102.53, highest since April 10, 2025. The US bond market was closed to observe the ‘Columbus Day’ holiday.
Fed rate hike probability :
October Fed rate hike probability continues to fluctuate around 20%; in the last three weeks, the probability has fallen sharply from 70% following a weak non-farm payroll report for September and dovish Fed commentary.Markets see the Fed hiking rates three times by June 2027, though.
2026 LBMA’s annual conference:
The two-day Global Precious Metals Conference underscored the fundamental case for gold on central banks diversifying their reserves; geopolitical polarization and fragmentation reshaping the global monetary system; and rising concerns over sovereign debt.Participants see gold prices trading around $5,013.30 an ounce by this time next year.
CFTC positioning:
Hedge fund managers cut their net bullish god bets to 15-week low as they reduced their net-long positions by 9598 lots to 114,820 in the week ending October 6, according to weekly CFTC data.Long-only positions fell 4,411 lots to 130,247 in the week ending Oct. 6. The long-only total was the lowest in 16 weeks, while short-only positions rose 5,187 lots to 15,427 — the highest in 10 weeks.
Gold ETF and COMEX inventory:
Total known global ETF holdings slipped on October 9 to 101.12 Moz after rising for five days in a row. ETF investors sold 177,800 Ounces on October 9, most in 2 months. However, ETF holdings are up 2.17 Moz YTD after a huge turnaround in ETF flows since the cycle low of 96.16 MOz reached on July 20. Holdings are up ~0.20 Moz since the beginning of the Iran conflict on February 28.Registered COMEX inventory at 15.07 Moz, has remained nearly steady since September 30. It is down nearly 38% since the record peak of 24.25 MOz reached in April 2025.
Fedspeak:
Speaking on economic outlook and monetary policy at National Association for Business Economics on October 12, Cleveland Fed President Beth Hammack, a Fed hawk, said business pricing power and a sturdy economy show that interest rates are not high enough to tame inflation. She added that frequent and smaller rate increases are preferred over big rate hikes to allow businesses to adjust.
Upcoming data:
Major US data on cards this week include weekly ADP employment change (October 13), September CPI inflation (October 14), September retail sales (October 15), Philadelphia Fed Business outlook (October 15) and September PPI inflation (October 15).Focus will be on Germany’s and France’s CPI data, too, which will be released on October 13 and October 15, respectively.UK’s monthly GDP data will be released on October 15.
Upcoming events:
Investors will pay attention to speeches of a battery of Fed speakers lined up in near term. The list of the Fed speakers includes Collins, Hammack, Waller, Barkin, and Bowman.The Fed Chair Kevin Warsh will participate in a fireside chat with IMF MD Georgieva at IMF’s annual gathering on October 16 in Bangkok, Thailand.
Gold Price Outlook :
Healthy ETF inflows and reduced Fed rate hike support the shiny metal; however, strong risk appetite, surging oil prices, elevated yields, and high probability of Fed rate hike in the coming months continue to pressurize the metal.Going ahead, focus will be mainly on Warsh’s talk and US CPI data.In the very short term, gold may push higher, but upside is likely to be contained unless some other major fundamental factor crops up in the picture/oil prices fall sharply. Oil could be a tug of war between the US and Iran as November 3midterm elections approach.Support is at 4150/4100/$4000, while resistance is seen at 4225/4255/4280/4337.Trading the range (buying the dips/selling into rallies) with a suitable and tight stop-loss is advisable presently. It is to be noted that domestic gold prices are expected to be under additional pressure due to the possibility of the domestic currency strengthening further on the RBI’s measures.(Disclaimer: Recommendations and views on the stock market, or any other asset classes or personal finance management tips given by experts and analysts are their own. These opinions do not represent the views of The Times of India.)
