Gold rates volatile on MCX on profit booking amid dollar's rise— Is it the right time to buy the yellow metal?

Gold rates experienced some volatility on the MCX during the evening session of trading on Thursday, January 15, due to profit booking amid a mild uptick in the US dollar. MCX gold February futures rose about 0.20% but soon slipped into the red. Around 5:30 pm, the yellow metal was flat at ₹1,43,144 per 10 grams on the MCX.

International gold prices also slipped on profit booking after the US dollar rose by 0.10%, making the yellow metal slightly expensive for overseas buyers. U.S. gold futures for February delivery fell over 1% to $4,584.70.

Easing geopolitical tensions also prompted investors to book some profits.

According to media reports, US President Donald Trump said that killings in Iran had stopped, and he will "see what the process is" about the potential US response to Iran.

Renisha Chainani, the head of research at Augmont, pointed out that gold and silver declined after U.S. President Donald Trump refrained from announcing new tariffs on imports of critical minerals.

"Trump said the U.S. would pursue negotiations with foreign nations to secure adequate supplies and quickly reduce supply-chain risks. That said, the White House left the door open to imposing import restrictions if talks fail to deliver timely results," Chainani noted.

"Safe-haven demand also cooled after Trump said he had been assured that executions of protesters in Iran had stopped, easing fears of an imminent U.S. military response," said Chainani.

Geopolitical tensions have been the main drivers behind the rise in gold prices since last year.

"Gold’s medium-term outlook remains constructive, supported by a combination of macro uncertainty, strong central-bank buying, and expectations of lower real interest rates. While gold has traditionally been viewed as a safe-haven asset, recent market behaviour shows it is also trading as a momentum asset, responding sharply to shifts in interest-rate expectations, the US dollar, and equity market volatility," said Ross Maxwell, Global Strategy Operations Lead, VT Markets.

Is it the right time to buy gold?

Experts highlight that increased geopolitical uncertainties and expectations of further rate cuts by the US Federal Reserve remain key positives for gold prices.

"The underlying trend remains firmly positive amid elevated global risk sentiment, with gold expected to stay volatile within a higher range of ₹1,41,000– ₹1,45,500 in the near term," said Jateen Trivedi, VP Research Analyst - Commodity and Currency, LKP Securities.

Chainani pointed out that gold has decisively broken above its earlier resistance at $4,570, opening the door to higher levels.

"The next key targets are $4,745–4,750 (78.6% Fibonacci extension, nearly ₹1,46,000) and $4,966–4,970 (100% Fibonacci extension, nearly ₹1,52,500)," said Chainani.

Maxwell believes gold prices could potentially move towards the $4,800–$5,000 per ounce zone over the next 12–18 months, especially if rate cuts materialise and geopolitical risks persist.

However, as prices already are near record highs, short-term corrections driven by profit-taking or temporary risk-on sentiment cannot be ruled out.

"For long-term investors, gold still makes sense as a portfolio hedge and diversifier, but a staggered or phased investment approach may be more prudent than aggressive lump-sum buying at current levels. Tactical investors may look to accumulate on pullbacks rather than chase rallies," said Maxwell.

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Disclaimer: This story is for educational purposes only. The views and recommendations expressed are those of individual analysts or broking firms, not Mint. We advise investors to consult with certified experts before making any investment decisions, as market conditions can change rapidly and circumstances may vary.