Motilal Oswal Financial Services advises investors to use a staggered approach for gold, predicting a 6-8% price correction in the near term. The firm argues that U.S. interest rates and inflation, rather than geopolitical tensions, are the primary drivers for bullion prices. This strategy aims to help investors avoid buying at market peaks.
Motilal Oswal Financial Services (MOFSL) is advising Indian investors to rethink their gold strategy, moving away from large, one-time purchases in favor of a staggered buying approach. In its latest H1 2026 outlook, the firm suggests that the current market environment makes it risky to chase price rallies driven by global conflicts alone.
Why Staggered Buying is Recommended
The firm anticipates a potential price correction of 6-8% in gold from current levels before a longer-term rise over the next 12 to 15 months. To navigate this, they suggest buying in parts rather than all at once. For Indian investors, the brokerage has identified accumulation zones between ₹1.30 lakh and ₹1.33 lakh per 10 grams, assuming a specific exchange rate for the rupee against the dollar. The firm has set medium-term targets at ₹1.68 lakh and ₹1.93 lakh per 10 grams.
Interest Rates Over Geopolitics
MOFSL argues that investors often pay too much attention to geopolitical headlines, which tend to be temporary. Instead, they emphasize that U.S. inflation data and Federal Reserve interest rate policies are the primary forces moving gold prices today. When interest rates or real yields rise, gold—which does not pay interest—becomes less attractive compared to interest-bearing assets like bonds or fixed deposits. Conversely, when rates fall, gold often sees increased demand.
Financial Context and Broader Risks
These insights come as MOFSL continues to expand its wealth and asset management footprint. The company recently reported a 14% year-on-year growth in operating profit after tax for the first quarter of fiscal year 2027, driven largely by its asset management business. While the firm’s research helps clients navigate market swings, investors should be aware that financial services are sensitive to overall market volatility, and any decline in assets under management can impact profitability.
Silver and Market Outlook
The firm also noted that silver presents a different set of risks compared to gold. Because silver is widely used in industries like electronics and renewable energy, its price reacts to global industrial activity as well as investment flows. This makes silver generally more volatile than gold. Investors looking ahead should monitor Federal Reserve policy changes, global liquidity levels, and U.S. inflation trends to gauge the potential for further price fluctuations.