Gold prices fell sharply in domestic and international markets on Wednesday, as easing US-China trade tensions dampened demand for the safe-haven metal. Analysts have now shifted their focus to key technical levels for MCX gold and silver.
On the Multi Commodity Exchange (MCX), gold futures for June 5 delivery were trading 0.45% lower at ₹93,230 per 10 grams around 9:10 AM. The decline mirrored trends in international markets, where gold prices also slipped amid improving trade relations between Washington and Beijing.
US-China Trade Deal Drives Market Sentiment
The recent agreement between the United States and China to reduce tariffs has been a key driver of sentiment. Both nations have decided to lower duties by a combined 115 percentage points for a 90-day period as they continue talks toward a comprehensive trade agreement. The US will reduce tariffs to 30%, while China will lower its rates to 10%.
US President Donald Trump expressed optimism regarding the deal, stating on Monday that he does not foresee tariffs returning to 145% after the 90-day window, signaling confidence that a long-term agreement will be reached.
Favorable Inflation Trends Support Outlook
Adding to the downward pressure on gold, inflation data from both India and the US have shown favorable trends. In India, retail inflation eased to a six-year low in April, with the Consumer Price Index (CPI) rising 3.16% year-on-year, compared to 3.34% in March and 4.83% in April of the previous year, according to the Ministry of Statistics and Programme Implementation.
In the US, consumer prices rose modestly in April, with the CPI increasing by 0.2% following a 0.1% decline in March. This marked the smallest annual rise in four years. The next key data point will be the Producer Price Index (PPI), the Federal Reserve’s preferred inflation measure, scheduled for release on Thursday.
Analysts’ Technical Outlook for Gold and Silver
Market experts have outlined critical support and resistance levels for gold and silver in the coming sessions.
Manoj Kumar Jain, Senior Analyst at Prithvifinmart Commodity Research, noted that while US-China trade progress is supporting silver prices due to its industrial demand, any potential Russia-Ukraine ceasefire could limit gains for gold. Additionally, rising US 10-year bond yields are expected to cap bullion’s upside.
Jain recommends a cautious approach toward gold this week, advising investors to avoid fresh positions. However, he sees potential in silver, suggesting buying on dips near ₹95,800, with a stop-loss at ₹95,100 and a target of ₹97,200.
For international markets, Jain highlighted gold support at $3,222–3,200 per troy ounce, with resistance at $3,274–3,300. Silver is seen with support at $32.80–32.55 and resistance at $33.30–33.66 per troy ounce.
On the domestic front, Jain expects MCX Gold to find support at ₹93,150–92,660, with resistance at ₹94,000–94,450. For silver, support is anticipated at ₹96,000–95,350, while resistance is pegged at ₹97,400–98,200.
Rahul Kalantri, Vice President of Commodities at Mehta Equities, echoed similar sentiments. He sees gold support at $3,200–3,178 and resistance at $3,255–3,270 internationally. Silver support is pegged at $32.30–32.00, with resistance at $32.90–33.20.
In rupee terms, Kalantri forecasts gold support at ₹92,250–91,780 and resistance at ₹93,350–93,790. Silver is expected to find support at ₹94,380–93,550, with resistance at ₹95,950–96,750.
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