Gold Prices to See Short-Term Dip Before Bull Run: Motilal Oswal Financial Services

Gold investment has been a lucrative option for investors in recent years, but it may be time to reassess your strategy. Motilal Oswal Financial Services (MOFSL) recommends adopting a gradual investment approach instead of making large lump sums during a bull market.

The brokerage firm notes that gold prices are no longer solely influenced by geopolitical tensions, but also by other key factors such as US inflation, interest rates, and real yields. MOFSL advises long-term investors to invest gradually at various price points rather than making one-time large investments.

The firm predicts a potential 6% to 8% decrease in gold prices from their current levels, followed by a price rally in the next 12 to 15 months. For Indian investors, MOFSL identifies the ideal buying range as between Rs 1.30 lakh and Rs 1.33 lakh per 10 grams, with a medium-term target of Rs 1.68 lakh and an eventual goal of Rs 1.93 lakh per 10 grams.

MOFSL emphasizes that interest rates are a crucial factor in determining gold prices, as gold does not generate regular income like fixed deposits or bonds. The firm suggests keeping an eye on US inflation, the Federal Reserve's interest rate decisions, global liquidity, central bank purchases, and ETF investments in the upcoming months.