Motilal Oswal Financial Services predicts Indian gold prices could reach up to Rs 1.68 lakh per 10 grams over the next year. While global geopolitical tensions and central bank buying support prices, elevated US interest rates and a strong dollar pose risks. Investors continue to shift toward gold ETFs, even as higher prices dampen traditional jewelry demand in India.
Motilal Oswal Financial Services has released a projection suggesting that domestic gold prices could climb to a range of Rs 1.60 lakh to Rs 1.68 lakh per 10 grams over the next 6 to 12 months. This outlook reflects the ongoing struggle between global uncertainty, which typically pushes investors toward gold as a safe asset, and monetary policy pressures from the United States.
Factors Driving Price Trends
The forecast relies heavily on the role of gold as a defensive hedge against geopolitical instability. Central banks worldwide have been diversifying their reserves, with sustained buying helping to put a floor under prices despite periods of market volatility. Analysts note that while there may be price corrections along the way, these are viewed as potential entry points for investors rather than signs that the structural demand for the precious metal has broken.
However, the path to these higher prices faces significant resistance from the United States Federal Reserve’s current monetary policy. With policy rates currently between 3.75 and 4 percent, the environment remains challenging for non-yielding assets like gold. High yields on US Treasury bonds and a robust dollar have historically made gold less attractive, creating a tug-of-war in the markets that has led to increased volatility compared to the trends observed in 2025.
Indian Market Shifts
In India, the behavior of buyers has changed as prices have risen. High costs have cooled demand for discretionary jewelry, as consumers pull back from non-essential purchases. Despite this, the appetite for gold as an investment remains strong. This is reflected in the inflows into gold Exchange Traded Funds (ETFs), which saw an influx of Rs 4,450 crore in September 2026 alone. This suggests that while individual jewelry shoppers are cautious, institutional and retail investors are continuing to allocate capital to the metal.
Investors looking at the precious metals space are also noting the behavior of silver. While silver has the potential for larger price gains compared to gold, analysts caution that it comes with much more aggressive price swings. This higher level of volatility means that silver generally requires a greater level of risk tolerance from those participating in the market. As the year progresses, the key monitorable for market participants will be how gold navigates the balance between its status as a global safe haven and the weight of interest rate policies in the US.