Gold prices are in a delicate dance, poised for a potential consolidation phase as we approach the end of May 2026. The immediate resistance level, nestled between ₹1,60,800 and ₹1,61,800, acts as a pivotal checkpoint, mirroring the upper Bollinger Band and a short-term supply zone. This technical analysis, provided by Manav Modi, Senior Analyst at Motilal Oswal Financial Services Ltd., highlights the current market dynamics.
The 1-hour chart reveals a cooling trend near the middle Bollinger Band at ₹1,59,450, indicating a loss of momentum after the recent spike. The Bollinger Bands, which expanded during the rally, are now contracting, suggesting a potential directional move. This consolidation phase is crucial, as it could determine the next move in the gold market.
The Fibonacci retracement from the swing low near ₹1,48,000 to the top near ₹1,68,000 showcases significant levels at 38.2% retracement near ₹1,60,300 and 50% around ₹1,58,000. These levels add further technical importance to the current zone. The disparity between international and domestic prices is also noteworthy, with domestic factors like import duty and restrictions impacting market balance and premiums.
The market's health is indicated by the reduced disparity from the moving average post-spike. If prices stabilize above the ₹1,58,000 to ₹1,55,000 range while volatility compresses, another expansion move towards higher levels could be on the horizon. However, the broader trend remains positive unless support breaks decisively, as suggested by the flag-like consolidation pattern.
In the broader context, the path of interest rates set by the Fed, particularly with the appointment of new governor Kevin Warsh, will be crucial. Economic data, along with updates from US-Iran and US-China relations, will also influence the market. Investors should carefully consider these factors when making decisions, as the views and recommendations of experts may not always align with market outcomes.
