Gold in Bangalore falls to ₹1,42,959 as 3-month trend turns bearish

Gold in Bangalore held at ₹14,295.90 per gram for 24K purity on July 23, unchanged from the prior session after a volatile fortnight that saw prices swing between ₹14,085.50 and ₹14,568.20.

"The current consolidation follows a sharp correction from the January peak of ₹1,79,140 per 10 grams, with prices now trading 20% below that level," Kaynat Chainwala, AVP Commodity Research at Kotak Securities, said.

The 22K variant stood at ₹13,095.04 per gram, while 18K gold was at ₹10,721.93. Over the past 90 days, the average 24K rate was ₹1,49,965.44, compared with a 180-day average of ₹1,51,884.48 and a one-year average of ₹1,36,704.79, according to exchange data. The July trend shows a 1.03% decline, extending June's 7.75% drop, after prices rallied 4.42% in May.

The Gold-to-Silver Ratio at 65.04 places the market in neutral territory, while the Nifty 50-to-Gold ratio of 1.67 suggests equities are deeply undervalued relative to bullion, historically a signal for capital rotation into stocks.

January Peak to July Correction

Bangalore gold hit its all-time high of ₹1,79,140 per 10 grams on Jan. 29, driven by a 25.38% monthly surge as geopolitical tensions over Greenland escalated and the US dollar weakened. Since then, prices have corrected 20.2%, with the sharpest monthly decline of 9.03% in March as the dollar strengthened and rate-cut expectations faded.

The June low of ₹1,41,504 per 10 grams on June 23 marked a 21% peak-to-trough decline, the deepest correction since the August 2024 rally began. July's range of ₹1,40,399 to ₹1,47,369 shows prices attempting to stabilize near the one-year average of ₹1,36,704.79.

Investment Signals and Forward Outlook

The Nifty 50-to-Gold ratio at 1.67 — below the 2.0 threshold — indicates equities are deeply undervalued relative to gold, historically a setup that precedes capital rotation out of bullion into stocks. The Gold-to-Silver Ratio at 65.04 remains in neutral territory, suggesting neither metal offers a relative bargain.

Traders now await the Federal Reserve's July 29-30 policy meeting, where markets price in an 81% chance of a rate hike in September, according to the CME FedWatch Tool. Elevated crude oil above $100 per barrel, after Brent surged 7% on July 23 following US threats of military action against Iran, is stoking inflation concerns and reinforcing the case for higher-for-longer interest rates — a headwind for non-yielding bullion.

Analysts see support for gold at ₹1,48,000 per 10 grams, while ₹1,55,000 remains a strong resistance zone, Jateen Trivedi, VP Research Analyst at LKP Securities, said. Prices are expected to stay under pressure with a volatile bias, reacting to crude oil, the dollar, and geopolitical developments.

This article is for informational purposes only and does not constitute investment advice.