Gold has been in a consolidation phase, down by 6% or Rs 6,100 per 10 gram from its all time high of Rs 99,358 on the MCX. The climbdown has been primarily on account of U.S. President Donald Trump’s U-turn on reciprocal tariffs, deferring implementation until July. He has also curtailed his belligerence toward China while declaring that he has no plans to sack Federal Reserve chair Jerome Powell.

As a result, the dollar index has strengthened 0.8% in the past five sessions against a basket of the top six currencies. The DXY is hovering just below the 100 mark.

The movement in gold is inversely related to the movement in gold.

On Monday, gold was trading around Rs 93,000, up by Rs 410 or 0.44%.

"Gold has corrected sharply from recent highs near Rs 99,000 to around Rs 92,500 – Rs 93,200 levels. The market has entered a short-term consolidation phase, reacting to evolving trade talk narratives, global economic data, and currency fluctuations. The price action and momentum indicators suggest a buy-on-dips strategy, but upside is likely to be capped amid persistent volatility," Jateen Trivedi, Vice President, Research Analyst - Commodity and Currency, LKP Securities, said.

Tech View

Trivedi said that the gold price is taking support near Rs 92,300 – Rs 92,500, which coincides with recent swing lows and the 21 EMA. The structure suggests a retracement of the prior uptrend, but not a complete reversal yet, he said, placing immediate resistance at Rs 94,200 and then Rs 95,700. A close above Rs 95,700 is needed to re-establish bullish momentum, while a break below Rs 92,300 could invite further selling toward Rs 90,200, the LKP Securities expert said.



The RSI is currently at 52 and is neither confirming strong bullish nor bearish momentum now and is supporting a range-bound to mild upside bias if Rs 92,300 holds, this analyst said.

Moreover, the narrowing of the Bollinger bands suggests a potential breakout ahead, though direction is yet uncertain. “A decisive move above the mid-band zone could lead to retesting Rs 95,000+, while a breakdown below the lower band (Rs 91,000) may extend the bearish correction,” Trivedi said.

Fundamental factors

US economic data and high-impact events to watch this week:

– ISM Services PMI & Prices

– Fed Interest Rate Decision. The two-day FOMC meeting begins on Tuesday, May 6, with the announcements coming on May 7.

– Initial Jobless Claims

These events have the potential to move gold significantly, Trivedi opines. "The Fed is expected to hold rates steady, but any dovish tilt could support gold. Watch jobless claims closely — a spike above expectations could renew rate cut bets.

Domestic yellow metal prices will also rely on the rupee movement. A stronger rupee will cap its gains.

Trivedi said that the USDINR is trading in a volatile 83.50–85.00 range, with dollar volatility and FII inflows keeping the rupee directionless.

Trading strategy

Trivedi suggests buy-on-dips strategy near Rs 92,300 with eye on Rs 95,700.

Gold remains in a broader uptrend but is experiencing a short-term correction.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)