Gold Rate Today: Gold Price Retraces From 2-Month High; Is It the Right Time to Buy Gold?

Gold Rate Today: Gold Price Retraces From 2-Month High

Gold prices came under some profit-taking pressure on Thursday, August 20, after the precious metal surged to a more than two-month high in the previous session.

Spot gold declined around 0.7% to $4,487.63 per ounce, after touching $4,525.79 on Wednesday, its highest level since June 2.

Despite the decline in international prices, gold remained firm in the domestic market. On the Multi Commodity Exchange (MCX), gold prices edged higher and traded around ₹1,58,300 per 10 grams.

The recent rally has been supported by a weaker US dollar, lower Treasury yields and expectations around liquidity conditions in the US bond market.

Gold Price Today

Gold prices in the domestic market remained elevated despite the recent pullback.

According to the data cited in the report, 24K gold was around ₹1,58,425 per 10 grams, while silver was trading around ₹2,39,708 per kg.

The recent movement highlights the strong momentum that has returned to precious metals after gold remained under pressure earlier in the year.

Why Is Gold Price Rising?

One of the key triggers behind the recent gold rally was an unexpected announcement from the US Treasury.

The US Treasury said it would significantly increase its buyback operations for longer-dated government bonds.

The move helped push US Treasury yields lower and weakened the dollar.

Lower yields can improve the attractiveness of gold because the precious metal does not generate interest income. When yields fall, the opportunity cost of holding gold can become relatively lower.

The dollar's weakness also tends to support gold prices because internationally traded gold is priced in US dollars.

Gold Remains Above Key Support

Gold has largely remained above the important $4,000-per-ounce support zone in recent weeks.

Buyers have increasingly appeared during price declines, helping the metal recover from the sharp sell-off earlier in the year.

However, gold remains below the levels seen before the US-Iran conflict began in late February, indicating that the broader price trend has experienced significant volatility.

Gold Price Outlook

Kaynat Chainwala, AVP - Commodity Research at Kotak Securities, said the retreat below $4,500 per ounce appears more like consolidation rather than a reversal of the broader bullish trend.

According to the technical view, $4,400 is an important support level for gold.

The recent move towards the $4,500 area was supported by falling long-term Treasury yields, expectations of easier financial conditions and a weaker US dollar.

However, the outlook is not without risks.

The Federal Reserve's policy stance remains important. Sticky inflation could keep policymakers cautious about rate cuts or even raise the possibility of tighter policy, which could support bond yields and the dollar.

That could create pressure on gold prices.

Central Bank Buying and ETF Flows

Continued central-bank purchases and inflows into gold exchange-traded funds could provide additional support to the precious metal.

If Treasury yields continue to soften and the dollar remains under pressure, gold could retain its positive momentum.

Investors will also be watching geopolitical developments and crude oil prices.

Higher crude prices could add to inflation concerns and influence expectations about future US monetary policy.

Technical Levels for Gold

Renisha Chainani, Chief Research Officer at Augmont, said gold had broken out of the $4,340-$4,440 range.

In rupee terms, this range corresponds to approximately ₹1,53,000-₹1,56,000.

According to the technical view, gold reached the $4,500 target, equivalent to approximately ₹1,58,500.

The next level highlighted in the analysis is $4,600, or approximately ₹1,62,000.

Therefore, traders and market participants may watch the following broad zones

Support: $4,400 / around ₹1,56,000

Recent breakout zone: $4,440 / around ₹1,56,000

Near-term resistance/target: $4,500 / around ₹1,58,500

Next higher level: $4,600 / around ₹1,62,000

These levels are technical reference points from the analysts cited in the source and should not be treated as trading instructions.

Is It the Right Time to Buy Gold?

The recent decline does not necessarily indicate that the broader gold trend has reversed.

Analysts cited in the report continue to highlight supportive factors such as central-bank buying, ETF flows and potentially softer yields.

At the same time, gold is trading at elevated levels following a strong rally, meaning investors should also consider the possibility of short-term volatility and profit-taking.

For long-term investors, factors such as investment horizon, asset allocation and risk tolerance are more important than attempting to predict a single entry point.

Investors considering physical gold, gold ETFs or other gold-related products should evaluate the costs, liquidity, taxation and risks associated with each option.

What to Watch Next

Several factors could influence gold prices in the near term

• US Treasury yields
• US dollar movement
• Federal Reserve policy expectations
• US inflation data
• Central-bank gold purchases
• Gold ETF inflows and outflows
• Crude oil prices
• Geopolitical developments
• Upcoming comments from Federal Reserve officials

The Jackson Hole economic symposium could also become an important event for markets as investors look for clues about the future direction of US monetary policy.

Key Takeaways

Gold prices retreated after touching a more than two-month high of $4,525.79 per ounce.

Spot gold was around $4,487.63 per ounce, while MCX gold traded around ₹1,58,300 per 10 grams.

Kotak Securities' Kaynat Chainwala viewed the move below $4,500 as consolidation rather than a reversal of the broader bullish trend.

$4,400 is an important support zone highlighted in the technical outlook.

Augmont's Renisha Chainani identified $4,600, or approximately ₹1,62,000, as the next higher technical level after the breakout.

Investors should monitor US yields, the dollar, Federal Reserve policy, central-bank buying and geopolitical developments before making decisions related to gold.

Disclaimer

This article is published solely for educational and informational purposes.

TrendRipperX is not registered with the Securities and Exchange Board of India (SEBI) as an Investment Adviser or Research Analyst.

The information presented is based on publicly available information and views attributed to market experts or brokerage research.

Nothing in this article should be interpreted as a buy, sell, hold, entry, exit, target or stop-loss recommendation from TrendRipperX.

The gold prices and technical levels mentioned are provided only as market reference points and are not trading instructions.

Readers should conduct their own independent research and consult a SEBI-registered financial professional before making any investment or trading decision.