Gold and silver prices continued their downward trajectory on Tuesday, reflecting the global market’s weakness. The optimism surrounding easing trade tensions between the US and China, along with a stronger US dollar, exerted significant pressure on precious metals.
On the Multi Commodity Exchange (MCX) on Tuesday, gold started 0.7% lower at Rs 1,20,106 per 10 grams, a decline from Rs 1,20,957 in the previous session. Similarly, silver also opened 0.69% lower at Rs 1,42,366 per kg.
By the closing bell, gold was trading 2.06% lower at Rs 1,18,461 per 10 grams, while silver dropped to Rs 1,41,424 per kg, down by 1.36%.
The decline in prices follows a robust two-month rally, prompting traders to lock in profits amid changing global dynamics. Rahul Kalantri, VP – Commodities at Mehta Equities Ltd, mentioned that the recent sell-off was driven by the metals slipping below key psychological levels due to a stronger dollar index and positive sentiments around US trade talks with China and India.
Furthermore, progress in Gaza peace talks has alleviated geopolitical uncertainties, leading to reduced safe-haven demand. Despite this, Kalantri noted that a weaker rupee is offering some support to bullion prices at lower levels.
Market focus has now shifted towards upcoming central bank meetings to gauge market direction. The US Federal Reserve is expected to announce a 25-basis-point rate cut in light of soft inflation data, with the European Central Bank and Bank of Japan likely to maintain their current policies.
Kalantri highlighted that gold’s support is anticipated around $3,940–3,905, with resistance levels near $4,055–4,100.
Darshan Desai, CEO of Aspect Bullion & Refinery, emphasized that the short-term trend hinges on trade talks and policy announcements. He pointed out that gold prices are decreasing due to weakened safe-haven demand amid hopes of a US–China trade resolution and a robust US dollar. Investors seeking gold as a hedge should prepare for short-term volatility and significant price fluctuations.
Moreover, Desai warned that if the Federal Reserve hints at fewer rate cuts than anticipated, it could further depress gold prices.
Experts view the current price decline as potentially temporary. Should global uncertainties resurface or central banks signal additional rate cuts, bullion prices might regain strength. Traders are advised to remain cautious and monitor upcoming sessions closely.