Gold prices witnessed a sharp decline on the Multi Commodity Exchange of India (MCX) on Monday, tracking losses in international bullion markets. Easing geopolitical tensions and renewed optimism over the US-China trade deal dampened the appeal of gold as a safe-haven asset, pressuring prices lower.
MCX gold futures opened weak at ₹95,500 per 10 grams, compared to the previous close of ₹96,518. By 9:05 AM, gold was trading down by ₹2,253, or 2.33%, at ₹94,265 per 10 grams. Silver futures also followed suit, slipping ₹578, or 0.60%, to ₹96,151 per kilogram.
In global markets, spot gold prices dropped 1.4% to $3,277.68 an ounce, while US gold futures declined 1.9% to $3,281.40.
Global Developments Ease Safe-Haven Demand
The decline comes as the US and China concluded high-stakes trade talks on a positive note over the weekend. US officials highlighted a “deal” aimed at reducing the trade deficit, while Chinese counterparts described reaching an “important consensus,” Reuters reported. Additionally, a ceasefire agreement between India and Pakistan has helped ease regional geopolitical tensions, further reducing the demand for gold as a protective investment.
“Gold prices fell sharply in morning trades across Asian markets amid signs of progress in trade talks between the US and China, along with some relief in geopolitical tensions,” said Rahul Kalantri, Vice President of Commodities at Mehta Equities Ltd. “A steady dollar index above the 100 mark, unchanged US Federal Reserve rates, and trade negotiation hopes are all factors limiting the upside for precious metals,” he added.
Market Outlook: More Downside Ahead?
Looking ahead, analysts expect further downward pressure on gold prices. Jigar Trivedi, Senior Research Analyst at Reliance Securities, cautioned that a stronger US dollar and easing geopolitical risks are curbing investor appetite for gold.
“Internationally, gold prices could slip toward the $3,260 – $3,240 per ounce range in the near term, barring any sudden escalation in global uncertainty,” Trivedi said. “Domestically, MCX gold June futures may extend their decline toward ₹93,000 per 10 grams,” he added.
Investors are now awaiting the release of the US Consumer Price Index (CPI) on Tuesday for fresh signals regarding the Federal Reserve’s monetary policy outlook.
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