Gold Prices Experience Fluctuations Amid US-China Trade Developments
As tensions between the US and China ease, gold prices have been under pressure for the second consecutive week. The MCX gold rate closed at ₹92,700 per 10 grams last Friday, reflecting a significant drop of ₹6,658 from its peak of ₹99,358. However, the precious metal saw a slight recovery over the weekend, with rates nearing ₹93,000 after hitting a low of ₹92,055 during the week. In the international arena, spot gold settled at $3,240.88 per ounce, while COMEX gold wrapped up at $3,257 per troy ounce.
Factors Influencing Gold Prices Today
Commodity market analysts attribute the current dip in gold prices to a robust rebound in the US dollar and positive developments in the US-China trade landscape. Reports indicating a reduction in tariffs from the White House have bolstered the dollar’s strength, which has hindered gold’s upward trajectory.
Jateen Trivedi, Vice President of Research for Commodity & Currency at LKP Securities, noted the rebound in gold prices on Friday. He stated, "After a minor gap-up opening, gold surged by ₹950, trading at ₹93,325 on the MCX. Support for Comex gold near $3,200 has stabilized sentiment amid ongoing uncertainties surrounding US trade agreements. The shifting perspectives from the US on trade discussions have prompted investors to unwind short positions in gold, fostering a fresh wave of upward momentum."
Easing US-China Trade Tensions
Sugandha Sachdeva, founder of SS WealthStreet, highlighted that the easing of US-China tensions is a primary factor behind the recent correction in gold prices. She explained, "Progress in negotiations with major economies like Japan, South Korea, and India has enhanced market sentiment, thereby lowering the safe-haven demand for gold. The US dollar index has also rebounded from a three-year low of 97.92, exerting additional pressure on gold prices."
Moreover, the Indian rupee has strengthened by over 1% this week, briefly surpassing ₹84 per US dollar, thanks to robust foreign portfolio inflows and dollar sales by exporters. This recovery has further influenced domestic gold prices.
Is Now a Good Time to Invest in Gold?
With gold prices on the decline, many investors are wondering if this presents a buying opportunity. According to Sachdeva, "Despite recent drops, gold is finding support around $3,200 per ounce and ₹91,700 per 10 grams. Concerns over the US economy, which contracted by 0.3% in Q1 2025, contrast sharply with the previous quarter’s growth of 2.4%. Additionally, the flat PCE price index for March may prompt the Federal Reserve to consider rate cuts in the upcoming meetings, potentially benefiting gold."
Current Outlook for MCX Gold Rates
Trivedi emphasized that volatility in gold prices is likely to remain high. He predicts trading within a range of ₹92,000 to ₹94,500 per 10 grams in the near term. Sachdeva added that while US-China relations show signs of improvement, ongoing uncertainties around a comprehensive resolution may keep some safe-haven demand intact in the short term. However, a sustained trade optimism could present challenges for gold prices in the medium run.
Key Triggers to Watch for Gold Prices
Several factors may influence gold prices moving forward. Key triggers include:
- Rupee movement against the dollar
- Economic indicators such as ISM non-manufacturing PMI
- The outcome of the US Federal Reserve’s policy meeting
- Developments in tariff negotiations with other countries
Given the current market dynamics, gold is expected to remain in a consolidation phase, with near-term support at ₹91,700 and resistance around ₹96,500 per 10 grams.
