In the present scenario, gold is expected to keep its nearly six-week-old range of $3950-$4200.

Gold price prediction today: Gold prices will continue to be influenced by US-Iran talks and macroeconomic data in America which would likely provide direction to the Federal Reserve on its rate decisions, says Praveen Singh, Head Currencies and Commodities, Mirae Asset ShareKhan.Performance:

On August 3, despite a sharp decline in oil prices, spot gold traded in a range of $4019-$4084; bulls remained cautious as a crucial week unfolds.

In the week ending July 31, spot gold closed with a loss of 0.2% at $4043. At the time of writing this article on August 3, the yellow metal was trading with a loss of 0.15% at $4036.

Geopolitics and oil:

Global oil prices began the month and the week a sharp decline of over 5% as the US and Israel cancelled a planned strike on Iran's energy infrastructure. Reportedly, Saudi Arabia, Qatar and the UAE urged the US to call off the strike and follow the path of diplomacy to reach an agreement with Iran over the contentious issue of the Strait of Hormuz.

The US President Trump said that Iran talks will begin Monday as Hormuz and nuclear deals are imminent. He did not offer much detail though.

Iran said that talks with Oman to allow more ships to sail through the Strait are making progress; focus of the talks is on securing a temporary route to ensure safety of ships.

Iran denied that talks are planned with the US.

Trump also said that a diplomatic deal must be reached quickly that must include immediate, complete and total reopening of the Strait. He added that Hormuz is controlled by the US Navy and nothing gets to Iran without US approval.

Iran has issued a Gulf-wide energy hit list should Trump carry through strikes on the country's energy infrastructure.

Meanwhile, Israel conducted fresh strikes on Gaza despite Hamas agreeing to disarm, albeit conditionally. Fresh attacks on Gaza could jeopardize peace deal revival.

Brent crude oil futures slumped nearly 9% to $81.55 on August 3 before cutting some losses. Futures were trading at $84.47, down nearly 6% at the time of writing this article.

Dollar Index and yields:

The Dollar Index has come under significant downside pressure due to a dovish FOMC outcome, intervention by the US and Japan in currency markets to prop up the ailing Yen and a sharp decline in oil prices that has improved risk appetite.

On Monday, the Index fell to 99.41, lowest since mid-June before recovering on strong US manufacturing data. At the time of writing, the Index was trading largely steady at 99.96. In the week ending July 31, the Index posted a loss of 1.5% to settle at 99.91. Currently, it is down nearly 1.8% from its cycle peak of 101.80 reached on June 24.

Two-year US yields at 4.25% were down 0.80% on Monday, while ten-year yields at 4.69% were down 1%. In the week ending July 31, 2-year yields fell 0.80%, while ten-year yields rose to a fresh-cycle high of 4.745% before settling at 4.73%-- 1.25% higher for the week.

Data roundup:

S&P Global US manufacturing PMI came in at 53.90 Vs the estimate of 53.80 in its July final reading.

ISM manufacturing at 55.60 (forecast 53.90, prior 53.30) expanded at the fastest pace since May 2022 as ISM price paid remained elevated. New orders improved further and the employment index shot back into the expansion zone for the first time since April 2022. Construction spending unexpectedly declined in June after stagnating in May.

RatingDog China manufacturing PMI fell to 50.90 in July as against the forecast of 52 and the prior data of 51.70. Data released last month showed that China's NBS PMI manufacturing and non-manufacturing (July) unexpectedly contracted.

Euro-zone manufacturing PMI (July) came in at 51.90 Vs the forecast of 52 (prior 52).

UK's manufacturing PMI at 51.90 fell short of the estimate of 52.80.

CFTC positioning:

Money managers decreased their bullish gold bets by 3,258 net-long positions to 120,328, according to weekly CFTC data on futures and options. Long-only positions fell 4,404 lots to 136,656 in the week ending July 28, while short-only positions fell 1,146 lots to 16,328-- the lowest in six weeks.

World Gold Council on Gold:

Central banks bought 289 tons in Q2, a record high.

Q1 quantum was revised sharply lower from 244 tons to 57 tons--the weakest start to a year in well over a decade.

Central banks' gold purchases are expected to decline this year, with the overall pace of purchasing likely to fall below 2025.

Bar and coin demand fell about 3% y-o-y to 307 tons, Jewellery demand was down 17% to 278 tons, the lowest since the pandemic, as recycled supply dropped 6% to 326 tons.

Mine production rose 2% year-over-year, reaching 966 metric tons in the second quarter, while output for the first half reached an all-time high of 1,867 tons across major producing regions worldwide, according to the World Gold Council (WGC) data.

Tether, the Stablecoin issuer, has emerged as a notable buyer in the second quarter. It had a stockpile of 146 tons, valued at $18.8 billion.

Central Bank Watch:

In a move that would mark the Bank of Korea's first purchase of domestically produced gold since 1967, the Bank of Korea is working with domestic gold producers, the Korea Exchange and the Korea Securities Depository to establish a framework to purchase gold refined in South Korea. The exercise aims at diversifying its forex reserves and sources of gold purchases.

ETF and COMEX inventory:

As of July 31, total known global gold ETF holdings stood at 96.72 MOz, down 2.23 MOz YTD. Investors have liquidated 4.20 MOz of their ETF holdings since the start of the Iran war on February 28.

Registered COMEX inventory stands at 14.66 MOz, down 39.54% from the record peak of 24.25 MOz reached in April 2025.

Upcoming data:

Key US indicators on tap this week include June JOLTs job openings (August 4), July ADP employment change (August 5), July ISM services (August 5) and July nonfarm payroll (August 7).

China's ratingDog services PMI (August 5) and July trade balance (August 7) will also be in focus.

Eurozone's services PMI (August 5) along with the UK's and services PMI (August 5) will also be on investorsâ radar.

Gold Price Outlook:

Dovish FOMC as the Fedâs credibility to rein in inflation is being questioned, weakness in the US Dollar and lower oil prices are positive for the yellow metal. However, this week is a crucial week as the US's PMIs and monthly job report will be released.

Lingering uncertainty over the US-Iran peace talks amid volatile Middle East situation pose a downside risk to the metal.

In the present scenario, gold is expected to keep its nearly six-week-old range of $3950-$4200. A significantly weak nonfarm payroll report can help the metal. However, as the past three reports have been encouraging, buyers need to be cautious.

(Disclaimer: Recommendations and views on the stock market, or any other asset classes or personal finance management tips given by experts and analysts are their own. These opinions do not represent the views of The Times of India.)

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