Motilal Oswal sees gold touching Rs 1.06 lakh-advises buying on corrections

Brokerage Motilal Oswal Financial Services (MOFSL) continues to maintain a "Buy on Dips" strategy for gold, advising investors to accumulate the precious metal near its support levels for long-term gains. With a target price of Rs 1,06,000 in the long run, MOFSL suggests that the current price range offers an opportunity for investors to add gold to their portfolios.

 

From a technical standpoint, MOFSL identifies a support range between Rs 90,000 and Rs 91,000, with resistance near Rs 99,000. These levels will play a crucial role in the upcoming market movements. Gold has performed impressively in recent times, but the market remains volatile, and MOFSL advises that investors should consider adding gold to their portfolios when prices dip within the identified support zone.

 

 

The first quarter of 2025 has been exceptional for both gold and silver, with gold posting gains of approximately 18%. This impressive performance followed a record-high surge to $3,500 per ounce, and gold prices in India approached Rs 100,000. However, like all markets, gold's rally was not without its corrections. A sharp sell-off followed the peak, showing how quickly market sentiment can shift.

 

Gold, being a safe-haven asset, has benefitted from a cocktail of geopolitical uncertainties, market volatility, and economic concerns. Despite the pullback in prices, the demand for gold has been sustained by investors seeking stability amidst global turbulence.

 

Factors Driving Gold’s Volatility

 

According to Manav Modi, Senior Analyst at Motilal Oswal Financial Services, the volatility in gold prices can be attributed to several key factors. These include:

 

Geopolitical Tensions: With escalating conflicts in the Middle East and rising tensions between China and Taiwan, investors have flocked to gold as a safe-haven asset.

 

US-China Trade War: Tariff wars between the US and China have caused significant fluctuations in gold prices. In April 2025, for instance, the U.S. raised tariffs on Chinese goods, prompting gold to surge to its all-time high of $3,500. However, signs of easing tensions and trade negotiations quickly led to a sharp decline in prices by the end of the month.

 

Federal Reserve's Policies: The U.S. Federal Reserve has maintained a cautious approach towards interest rates. Despite slowing economic growth, the Fed has refrained from aggressive rate cuts, keeping the market uncertain about the future course of monetary policy. As a result, gold remains an attractive asset amidst fears of inflation and economic slowdown.

 

Supply and Demand Dynamics: Central banks, including the Reserve Bank of India, continue to be net buyers of gold in 2025, though the pace of purchases has slowed due to elevated prices. A critical concern for gold investors is the weakening physical demand, particularly in India and China, where gold prices are trading at a discount. This suggests a potential slowdown in demand from key consumer markets. 

Gold’s Performance on Akshaya Tritiya: A Historical Perspective

 

For Indian investors, gold’s performance during significant festivals like Akshaya Tritiya provides a benchmark for returns. Over the last 15 years, gold has delivered a10% compound annual growth rate (CAGR). Despite some price corrections, gold has shown consistent growth over time. This pattern has made gold a popular investment, especially for long-term investors looking for a hedge against inflation and market volatility.

 

During the current year, while the surge in gold prices has been sharp, there have been instances of price corrections, providing opportunities for investors to buy on dips. As the market recovers, gold's steady rise in value makes it an attractive proposition for investors across risk profiles. 

  "There are several platforms for market participants to invest in gold based on their risk profile. Investment can be in form of ETF which is now a very popular way of investments, exchange traded derivatives, Digital Gold and Physical bars and coins," said Motilal Oswal in a note.