Gold prices are poised for a significant rebound, with predictions indicating a potential rally to ₹1.48 lakh per 10 grams on the Multi Commodity Exchange (MCX) within the next one to two weeks. This forecast comes from Vandana Bharti, Head of Commodity Research at SMC Global Securities, who noted that recent price corrections have opened doors for renewed institutional and central bank buying.
Central Banks and ETFs Drive Demand
Bharti highlighted that central banks remain pivotal in underpinning gold's value, consistently being net buyers despite market fluctuations. China continues its aggressive gold acquisition, with South Korea also announcing new purchases. Furthermore, Exchange-Traded Fund (ETF) inflows, which had slowed in previous months, have reportedly resumed in July following price adjustments, indicating renewed investor interest.
“ETF buying has started again after nearly four months. Central banks have remained net buyers throughout, and that is helping gold consolidate before the next move higher,” Bharti explained to Business Today.
Physical Market Outperforms Paper Market
The recent price correction has been predominantly confined to the paper market, while the physical market demonstrates robust activity. Bharti emphasized that demand for physical gold—across jewellery, central bank reserves, and over-the-counter (OTC) transactions—has surged during the second quarter of 2026. This strong physical uptake suggests a healthier underlying market structure compared to futures and options volumes, which remain subdued.
Investment Demand Remains Strong
While elevated prices have tempered jewellery demand, investment in gold coins and bars continues to be robust in India. Bharti pointed to significant trading volumes on the MCX as evidence of sustained investor participation, viewing the recent price dips as a consolidation phase rather than a reversal of the long-term upward trend.
Silver Outlook Positive Amid Volatility
Looking beyond gold, Bharti also maintains a constructive outlook on silver, though she anticipates greater near-term volatility. Silver, influenced by bond yields and the US dollar, is expected to find support from gradual ETF inflows and its strong industrial applications in sectors like renewable energy and electronics. International silver prices could climb towards $64-$65 per ounce, with domestic prices likely to follow suit, though a clearer trend is expected post the US Federal Reserve's September policy meeting.
Global Factors Influence Commodity Markets
Broader commodity markets continue to be shaped by movements in the US dollar index, global bond markets, and geopolitical developments, particularly tensions involving the US and Iran. For investors, the current correction is seen as an opportunity for value buying, with continued support from central banks and renewed ETF interest expected to bolster gold prices going forward.