Gold appears to be transitioning from a sharp correction into a consolidation phase.

Gold price prediction today: Recent gold price trends suggest that the worst of the downside may be behind us, says Vedika Narvekar, Research Analyst – Commodities & Currencies, Anand Rathi Shares and Stock Brokers.After a volatile July, gold finally showed signs of finding a base. The biggest challenge for bullion remained the same throughout July, ie the higher-for-longer interest rate expectations. Treasury yields climbed back towards multi-year highs, the US dollar stayed firm and both continued to act as significant headwinds for a non-yielding asset like gold. However, despite these headwinds, gold repeatedly found support around the $4,000/oz mark and ended July with its first monthly gain since February.In the Indian markets, gold has broadly mirrored the international correction, though the import-duty hike in May and rupee depreciation have cushioned local prices, leaving domestic gold prices up roughly 6% YTD even as the international price is down 7% over the same period.Early this week, bullion has started on a firmer footing, supported by a weaker US dollar, easing crude oil prices following renewed US-Iran diplomatic efforts and improving risk sentiment. Even so, the market remains cautious, with traders waiting for fresh economic data before taking aggressive positions.On the demand front, the latest World Gold Council Gold Demand Trends report reinforced that the long-term investment case for gold remains intact despite recent price weakness. Central banks purchased 289 tonnes in Q2, marking the strongest second-quarter buying on record, while China continued adding to its reserves.Although global ETF flows remained weak during Q2, Asian demand strengthened considerably and July has seen signs of improving ETF inflows, particularly from China, where institutional investors have been buying aggressively on dips around the $4,000/oz level. In India, demand has remained resilient despite elevated prices, supported by a weaker rupee, steady ETF inflows and healthy old-gold exchange activity, helping cushion the impact of softer jewellery demand.

Key Focus This Week

Markets will closely track the US labour market data, beginning with the JOLTS job openings report followed by Friday’s Non-Farm Payrolls report. These releases will be critical in determining whether the Federal Reserve remains on course for a potential September rate hike. Alongside employment data, investors need to closely watch developments surrounding US-Iran negotiations, oil price movement followed by dollar all of which could influence gold’s near-term direction.

Technical Levels & Near-Term Outlook

Gold Price Outlook

Gold appears to be transitioning from a sharp correction into a consolidation phase. The repeated defence of the $4,000/oz level, resilient central bank buying and improving Asian investment demand suggest that the bulk of the downside may already be behind us. While elevated real yields and lingering expectations of another Fed rate hike could continue to cap gains in the near term, easing oil prices reduce the risk of further inflation-driven tightening.As long as $4,000/oz holds, gold has the potential to gradually recover towards $4,220/oz, with a sustained move above that zone opening the door to $4,300/oz. Any dip towards $3,900-3,850/oz is likely to attract fresh strategic buying, keeping the broader long-term outlook constructive.

International Silver CMP: $60.70/oz

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