In its Precious Metals Report for the first half of 2026, MOFSL said inflation trends, US interest rates and real yields have become more important factors for gold prices than geopolitical tensions alone.
The brokerage said while gold’s long-term outlook remains supported by central bank buying, fiscal concerns and its role as a hedge against currency depreciation, near-term price movements could remain volatile due to uncertainty around monetary policy.
Should investors buy gold now?
MOFSL said investors with a long-term horizon should avoid making lump-sum investments during sharp price movements and instead consider a staggered accumulation strategy.
This means spreading purchases over different price levels rather than trying to predict the exact market bottom.
The brokerage expects gold could see a correction of 6-8% from current levels before moving higher over the next 12-15 months.
For Indian investors, MOFSL has identified accumulation levels between ₹1.30 lakh and ₹1.33 lakh per 10 grams, assuming dollar/rupee at 95.5.
The brokerage has projected medium-term targets of ₹1.68 lakh per 10 grams, followed by ₹1.93 lakh per 10 grams.
Why investors should watch interest rates
Gold does not provide regular income like bonds or fixed deposits. Therefore, its attractiveness often depends on interest rates.
When real yields rise, investors may prefer interest-bearing assets, putting pressure on gold prices. On the other hand, expectations of lower interest rates can support bullion demand.
MOFSL said the key factors to track in the coming months will include US inflation data, Federal Reserve policy decisions, global liquidity conditions, central bank purchases and ETF flows.
What about silver?
Silver investors need to consider a different set of factors because the metal has both investment and industrial demand.
Apart from its role as a precious metal, silver is widely used in industries linked to electronics, renewable energy and electrification.
MOFSL said silver prices will continue to be influenced by industrial demand, global economic conditions, investment flows and monetary policy.
This also means silver can be more volatile than gold, as it reacts not only to interest rates and currency movements but also to changes in industrial activity.
The takeaway for investors
According to MOFSL, precious metals remain a long-term portfolio diversification tool, but investors should focus on discipline rather than timing short-term price movements.
Tracking inflation, interest rates and central bank actions could be more important than reacting to every geopolitical headline, the brokerage said.
