Gold Prices May See Short-Term Correction, MOFSL Advises Gradual Investment

Investors may need to rethink their approach to buying gold, according to Motilal Oswal Financial Services (MOFSL). The brokerage firm advises against making lump-sum investments in gold during market rallies and instead recommends a staggered strategy. This approach involves investing gradually over time rather than putting all funds into the asset at once.

Gold prices may initially decline by 6% to 8% from current levels before resuming their upward trend, according to MOFSL. The brokerage expects this correction to create a better buying opportunity for long-term investors. For Indian investors, MOFSL identifies the ₹1.30 lakh to ₹1.33 lakh per 10 grams range as an attractive accumulation zone.

MOFSL notes that gold prices are influenced by more than just geopolitical tensions. Several macroeconomic factors now play a crucial role, including US inflation, Federal Reserve interest rate decisions, real interest rates, global liquidity, central bank gold purchases, and gold ETF investment flows.