Gold prices climbed in the domestic futures market on Tuesday morning, bolstered by ongoing uncertainty surrounding US President Donald Trump’s tariff policies and concerns over a potential recession in the world’s largest economy. MCX Gold June 5 contracts were up by 0.16%, trading at ₹93,397 per 10 grams around 9:10 AM. The precious metal has surged by 5% in the domestic spot market so far this month.
On Monday, gold saw some profit booking, with MCX Gold June futures dipping by 0.5%, settling at ₹93,252 per 10 grams. However, fresh buying emerged on Tuesday as fears over the impact of the US-China trade war on global economic growth kept investors focused on gold as a safe-haven asset.
Tariff Uncertainty Drives Gold
The volatility in gold prices is primarily driven by the uncertainty surrounding Trump’s tariff policies. After announcing a 90-day pause on reciprocal tariffs, Trump has indicated that any exemptions would be temporary. Media reports also suggest that Trump may announce tariffs on semiconductor imports as early as next week, further keeping market participants on edge.
Reuters reported that Trump would announce the tariff rate on imported semiconductors over the next week, heightening concerns in the market.
Interest Rate Cuts and Dollar Weakness Support Gold
In addition to tariff uncertainty, gold prices are also being supported by expectations of rate cuts from the US Federal Reserve. With mounting fears of an economic slowdown, the Fed is expected to resume rate reductions in June.
Investment flows into Chinese physically backed gold ETFs have exceeded those of the entire first quarter and outpaced inflows into US-listed funds, according to World Gold Council data, as reported by Reuters. This trend further signals growing global interest in gold as an investment.
The weakening US dollar is also providing positive momentum for gold. The US dollar index fell below 100 for the first time in over three years, reacting to China’s new reprisals against US imports. Renisha Chainani, Head of Research at Augmont, noted, “The dollar has declined over 7% since Trump’s inauguration and more than 2% since his comprehensive trade policy was announced last week.”
Gold as a Safe-Haven Asset
Chainani emphasized that the rationale for increasing gold allocations is stronger than ever, given the rising tariff uncertainty, sluggish growth, inflationary pressures, and persistent geopolitical risks. The evolving global trade and economic landscape further strengthens gold’s position as a safer investment.
Key Levels for MCX Gold and Silver
Experts are closely watching key levels for MCX Gold and silver. Chainani highlighted that if the US dollar weakness persists, gold could reach $3,300 (approximately ₹95,000) in the near term. However, she also cautioned that with gold prices having surged rapidly, any correction below $3,200 (around ₹93,000) could lead to profit-booking, potentially pushing prices back toward $3,100 (around ₹90,000).
Manoj Kumar Jain from Prithvifinmart Commodity Research expects gold and silver prices to remain volatile throughout the week. Jain identified key support and resistance levels for both metals:
Gold: Support at $3,200-$3,184 and resistance at $3,244-$3,268 per troy ounce.
Silver: Support at $31.80-$31.40 and resistance at $32.50-$32.84 per troy ounce.
Support is seen at ₹92,770-₹92,220, with resistance at ₹93,660-₹94,000.
For silver, support is at ₹94,000-₹93,350, with resistance at ₹95,500-₹96,650.
Jain suggested buying silver around ₹94,000 with a stop loss at ₹93,220, targeting ₹95,500.
As the global economic landscape remains unpredictable, gold continues to attract attention as a safe-haven asset, and its price is expected to remain volatile, driven by both geopolitical and economic factors.
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