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Gold prices could rise to USD 4,600-5,000 per ounce in the first half of 2027 as elevated US real yields and a stronger dollar ease, even as the precious metal is expected to consolidate at high levels through the remainder of 2026, ICICI Bank said in a research report.
The bank expects gold to trade in the USD 4,200-4,600 per ounce range for the rest of 2026, with a marginal upside bias in the first half of 2027. It said the medium-term outlook remains supported by investment demand, continued central bank purchases and demand for gold as a hedge against geopolitical, financial and policy uncertainty. We retain our view gold prices to trade in the USD 4200/oz to USD 4600/oz range over the remainder of 2026. We expect the metal to trade with a marginal upside bias in H12027, trading in USD 4600/oz to USD 5000/oz range, the report said. Gold has corrected sharply in September after gaining around 9 per cent in August, with prices down nearly 8 per cent during the month so far. ICICI Bank attributed the correction to a more hawkish repricing of US monetary policy amid persistent inflation concerns, higher oil prices and stronger-than-expected labour market data. The report, however, said these near-term pressures may not be enough to reverse the broader strength in bullion. Gold ETFs recorded USD 17.8 billion of inflows in August, taking third-quarter gold ETF demand to 144.7 tonnes, while the People's Bank of China bought 20 tonnes of gold in August, its largest monthly purchase since October 2023. The bank said concerns over the long-term sustainability of US fiscal deficits and high public debt, continued central bank diversification away from US dollar-denominated assets and gold's role as a portfolio hedge are likely to remain structural supports. As and when global energy pressures come-off, there is an increasing likelihood of bullion to trade with an upside bias, the report said. For India, the bank expects local gold prices to remain largely driven by global bullion prices, with the rupee adding another source of volatility. It retained its forecast for domestic gold prices to trade at Rs 1.40 lakh-Rs 1.60 lakh per 10 grams through the remainder of 2026. Domestic jewellery demand remains constrained by elevated prices, although wedding demand has stayed relatively resilient and festive and wedding activity is expected to provide some support. Gold imports fell to USD 2.3 billion in August from USD 4.2 billion in July, while Indian gold ETF inflows rose to Rs 26 billion in August. (ANI)
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