Gold may rally further amid macro uncertainty and global tariff tensions

Gold prices are likely to extend gains in the coming week, as macroeconomic uncertainty, tariff disputes and central bank buying continue to underpin investor appetite for the precious metal, according to analysts.

Traders will closely monitor a series of key macroeconomic data releases from major economies, including the UK and EU GDP, the US Core PPI and Core CPI.

Speeches by US Federal Reserve officials will also be in focus for further guidance on the near-term trajectory for the gold prices.

Prathamesh Mallya, DVP Research, Non-Agri Commodities and Currencies at Angel One, said gold prices continue to rally and make new highs in the international as well as domestic futures.

"From the lows of ₹98,079 per 10 grams made on July 28, to the highs of ₹1,02,250 per 10 grams, the shine in gold prices continues to increase the wealth of gold investors. In the international markets, prices have surged from $ 3,268 per ounce on July 30 to $ 3,534.10 per ounce as of August 8. The rally seems unstoppable," he said.

Last week, the most traded gold futures for October contracts climbed ₹1,763 or 1.77 per cent on the Multi Commodity Exchange (MCX).

Mallya attributed part of the rally to heightened tariff situation, which has caused chaos across the global world order and if it escalates further, then, gold might see further rally in the precious metal prices in the international markets towards $ 3,800 per ounce mark, while MCX futures will move higher towards ₹1,10,000 per 10 grams mark over the next three months.

"Tariffs, tariffs, tariffs -- it goes round and unending. In order to reshape global trade in America's favour, the US has started imposing higher tariffs on goods from dozens of trading partners, and India has found itself in the crosshairs of US President Donald Trump as he announced doubling tariffs on India to 50 per cent over its move to purchase oil from Russia.

"This macro uncertainty has led investors globally to realign their portfolios, attuning increased allocations to gold, lifting prices further," Mallya added.

According to Jateen Trivedi, VP Research Analyst Commodity and Currency at LKP Securities, the near-term bias for gold remains positive as long as it sustains above ₹99,000 per 10 grams.

"While the dollar's strength last week capped upside in gold, domestic prices are cushioned by rupee weakness, which is likely to keep the downside limited. In the near term, volatility is expected to persist, with a broader trading range of $ 3,3603,425 on Comex and ₹98,5001,03,000 per 10 grams on the MCX," Trivedi noted.

NS Ramaswamy, Head of Commodity & CRM at Ventura Securities, said speculation about a US Federal Reserve interest rate cut has intensified following weaker-than-expected economic data last week.

On Friday, Comex gold futures for December delivery surged to an all-time high of $ 3,534.10 per ounce in New York before settling at $ 3,491.30 per ounce on Saturday.

"With both US growth and inflation worsening after last week's soft jobs report, gold remains at record levels. Central banks are buying, global trade wars are ongoing, geopolitical risks are elevated, and ETF holdings continue to expand. The Fed cutting interest rates could be the missing catalyst to reignite a record-breaking rally," he said.

Ramaswamy also pointed to fresh triggers, including the US imposing import tariffs on one-kilo and 100-ounce gold bars, creating supply concerns, and fears about the Federal Reserve's independence, which are boosting investor demand.

"Looking ahead, investors believe central banks will continue to add gold to their reserves given the still-uncertain economic environment and the drive to diversify away from the US Dollar," he added.

Analysts also said that unless there is a sharp reversal in macroeconomic conditions, the combination of geopolitical uncertainty, trade tensions, currency fluctuations and central bank demand is expected to keep gold prices on an upward trajectory in the medium term.