Gold fundamentals remain quite constructive. The metal may push higher to test resistance around $4200 in near-term. (AI image)
Gold price prediction today: Gold prices are expected to continue their bull-run, but downside correction risks are rising, says Praveen Singh, Senior Fundamental Research Analyst- Currencies and Commodities at Mirae Asset Sharekhan. The analyst shares his views on gold price outlook and what levels investors should watch out for:Gold Performance:
- On October 13, Spot gold traded between $4008 and $4117.
- The metal posted its eighth consecutive weekly gain in the week ending October 10 as it closed with a huge weekly gain of 3.37% at $4017.
- The ongoing rally in gold is being driven primarily by huge ETF inflows, Fed rate cut expectations, inflation hedging as the Fed is cutting rate into elevated inflation, US shutdown and de-dollarization.
- The US treasuries being held by foreign central banks fell to the lowest level since 2013 as central banks diversify away from the US Dollar into gold and other assets.
- The yellow metal was trading with a daily gain of $89, or 2.22%, at $4107 at the time of writing this report on October 13. The MCX December gold contract at Rs 124,675 was up 2.75%.
Data roundup:
- China’s trade data is encouraging despite huge US tariffs: China’s trade balance (September), released on October 13, came in at $90.40b Vs the forecast of $98.05b as both imports and exports beat their respective forecasts. China’s shipments overseas grew at their fastest pace in six months.
- European Central Bank minutes: Minutes from the European Central Bank’s (ECB) September meeting showed a broad consensus to maintain the current monetary policy stance as members see interest rates being consistent with the 2% medium-term inflation target.
- University of Michigan sentiment (October prel.) data released on Friday came in at 55 Vs the forecast of 54 (prior 55.10). One-year and 5-10-year inflation expectations were noted at 4.6% and 3.7% respectively, which were almost in line with the expectations
Upcoming data and events:
- Major US data on cards this week include retail sales advance (October 16), PPI final demand (October 16), Philadelphia Business Outlook (October 16), housing starts (October 17), import and export price indices (October 17)), TIC flows (October 18) and leading index (October 20).
- Major Chinese data on deck this week include PPI and CPI (October 15).
- The Fed Chair Powell will speak on economic outlook and monetary policy at NABE annual meeting on October 14.
- Fed governor Waller will speak on the payment panel at IIF on October 15, while governor Miran will speak at CNBC’s “Invest in America forum” in a talk titled ‘The game plan and the Fed’ on October 15. He will participate in a moderated conversation at IIF annual meeting on October 16 and Semafor Fall 2025 World Economy Summit Gallup Building on October 17.
US Dollar Index and yields:
- The US Dollar Index at 98.97 on Friday was up nearly 1.3% for the week.
- Ten-year US yields fell 1.9% to 4.03% while 2-year yields were down around 2% for the week.
US-China tensions flare:
- In response to China unveiling wide-ranging global export controls on products containing even small portions of certain rare earths last week, Trump threatened to cancel a planned in-person meeting with Xi — their first in six years. The US President also announced plans to double tariffs on Chinese goods to 100%, along with sweeping curbs on “any and all critical software.” However, following the US threats, Beijing justified its moves as defensive actions in reaction to the US introducing new restrictive measures targeting China since talks between the two in Madrid in September.
- On Sunday, Trump’s tone was somewhat reconciliatory as he said that China is fine, and the US does not want to hurt China. He signaled an openness to deal with China to alleviate trade tensions, though he called export controls announced by Beijing as a major barrier to talks.
- US treasury secretary Bessent said on Monday that US can move more aggressively than China as everything is on the table; however, he struck an assuasive tone by saying that 100% tariff does not have to happen. Nonetheless, President Trump is expected to meet his Chinese counterpart in South Korea in late October as the duo will strive to de-escalate trade tensions.
World Gold Council (WGC) warns on overextended gold market:
- WGC warned that a rally on huge investment demand has pushed the gold market into an overextended territory and downside risk is developing, though positive factors will continue to support the metal through year-end.
- According to a WGC report, 145.6 tons of gold flowed into global ETFs in September, valued at more than $17.3 billion. For the quarter, ETF holdings increased by 221.7 tons (nearly $26 billion). North American investors accounted for inflows of 88.4 tons valued at $10.5 billion. European-listed funds recorded fifth consecutive month of inflows, with September marking the region’s third-strongest month ever for gold ETF activity as European holdings increased by 37.3 tons ($4.4 billion). Asian-listed ETFs saw their holdings increase by 17.5 tons ($2.1 billion) as India led the region with inflows of US$902mn.
Gold ETF:
- Total known global gold ETF holdings reached a fresh cycle high of 97.51 MOz and are up 17.69% YTD. Holdings are less than 2% below the all-time high level of 111.25 noted in October 2020.
Gold Price Outlook:
- Gold is up 56% YTD and has rallied 25% since its cycle low of $3,286 on August 1.
- Gold fundamentals remain quite constructive. The metal may push higher to test resistance around $4200 in near-term, but downside correction risks are rising due to parabolic rise in prices in the last two and a half months.
- It is advisable to put a suitable risk mechanism in place to safeguard profits.
- Support is at $3985/$3885. Interim resistance is at $4150.
Silver:
- The grey metal has surged to a record high on a historic short squeeze in London and huge ETF inflows. Free float silver stock in London is down from 616.10 MOz in July 2016 to 200.90 MOz in September 2025.
- London silver stocks are down due to deficits and traders rushing to ship metal to the US amid fears of tariffs. “Free float” stock, calculated as total stocks less holdings of the nine largest ETFs, has fallen from over 850 million ounces in mid-2019 to 200.90 MOz presently as a large part of the metal is tied up in ETFs. Annualized one-month lease rate surged to 35% on October 10.
- New York future (December) trade at a massive discount of around $1.55 to London prices due to lack of enough metal in London.
- Indian demand is also surging leading to domestic shortage.
- Spot silver at the time of writing this article was changing hands at $51.98, up 3.33% for the day, while the MCX December silver contract at Rs 154,808 was up 5.69%.
- Silver, like gold, has strong fundamentals to push further higher; however, considering the parabolic rise since August 1 (40.50% from $37.01 level), corrections can’t be ruled out. Therefore, the best way is to place a suitable stoploss to guard one’s profits/limit losses. A breach of $52.50 level will open the way to $55 as the next upside target.
## As MCX gold and silver are not moving strictly in line with the London prices, investors need to pay attention to international prices.(Disclaimer: Recommendations and views on the stock market and other asset classes given by experts are their own. These opinions do not represent the views of The Times of India)