Gold Price Forecast: Bullion Posts First Weekly Gain Since May; Is It Right Time to Buy Gold or Wait More?

Gold has staged an impressive recovery after enduring weeks of heavy selling pressure, reviving investor interest in the precious metal. The rebound comes at a time when expectations around US interest rates have shifted, the US dollar has weakened and concerns over the global economic outlook continue to linger.

Gold Price Outlook: Is the Recent Recovery in Bullion, a Buying Opportunity for Investors?

While bullion has regained momentum, investors are still debating whether the recent rally marks the beginning of a sustained uptrend or merely a short-term bounce before another correction.

“Gold and silver pulled off a sharp comeback last week, breaking a losing streak that had dragged on for weeks and posting their first weekly gains since May……….The weaker-than-expected US jobs report significantly changed market expectations around the Federal Reserve’s interest-rate outlook,” According to Dr. Renisha Chainani, Head of Research at Augmont said.

How Weak US Payroll Data Triggered Gold’s Comeback

The latest US payroll report showed hiring slowed much more than economists had expected, strengthening hopes that the Federal Reserve may not need to keep interest rates elevated for an extended period. Lower interest-rate expectations generally benefit gold because the metal does not generate fixed income, making it more attractive when bond yields decline.

A weaker US dollar also supported bullion prices by making gold cheaper for overseas buyers, improving global demand.

“As traders reduced expectations of another Fed rate hike, one of the biggest headwinds for gold and silver disappeared. Precious metals generally struggle when investors expect higher interest rates, so the shift in policy expectations provided strong support,” Augmont expert Chainani said.

Central Banks Continue Supporting Gold

Despite fluctuations in investment demand, analysts believe gold’s long-term fundamentals remain intact.

Central banks across the world continue to diversify their reserves by purchasing gold, while ongoing geopolitical uncertainties continue to provide structural support for bullion. Although exchange-traded fund (ETF) investors have remained cautious, official sector buying has continued steadily.

Although the interim understanding between the US and Iran has eased immediate geopolitical concerns, uncertainty surrounding the Strait of Hormuz continues to keep a geopolitical risk premium alive. “At the same time, central banks are steadily adding gold to their reserves even as ETF investors continue to reduce their exposure, highlighting the contrast between strategic long-term buying and short-term investment flows,” she said.

Should You Buy Gold Now or Wait?

While sentiment has improved, experts believe investors should avoid chasing prices immediately after a sharp rebound.

The next phase of gold’s movement will largely depend on upcoming US economic data, Federal Reserve commentary, bond yields and the direction of the US dollar. Any fresh signs of slowing inflation or a softer policy stance from the Fed could provide additional support to bullion, while stronger economic data could revive selling pressure.

Looking ahead, Chainani expects volatility to remain high, with investors closely monitoring key macroeconomic events scheduled this week.

“Investors will now watch the US ISM Services PMI and the minutes of the latest Federal Reserve meeting for further direction on interest rates. Gold’s rebound has been swift, so some short-term profit booking towards the $4,080-$4,100 zone would not be surprising before prices attempt another move towards $4,350. Silver could also witness a temporary correction before resuming its broader uptrend,” she said.

Disclaimer: The views and recommendations expressed are solely those of the individual analysts or entities and do not reflect the views of Goodreturns.in or Greynium Information Technologies Private Limited (together referred as “we”). We do not guarantee, endorse or take responsibility for the accuracy, completeness or reliability of any content, nor do we provide any investment advice or solicit the purchase or sale of securities. All information is provided for informational and educational purposes only and should be independently verified from licensed financial advisors before making any investment decisions.