Global gold prices continue to fluctuate, driven by trade developments and geopolitical tensions. Should investors consider buying or selling gold in the coming days? Here’s what experts predict.
Gold prices have been highly volatile, swinging between record highs and sharp declines as global trade uncertainties weigh on the precious metal’s outlook. In India, rising tensions with Pakistan have further fueled safe-haven buying.
Gold’s Recent Performance
Last week, gold posted significant gains, closing at $3,325 per ounce. However, optimism over a US-China trade agreement erased those gains. On the Multi Commodity Exchange (MCX), gold ended near ₹96,500 per 10 grams, while silver settled around ₹96,700 per kilogram, pushing the gold-silver ratio above 100:1.
The rebound in US stock markets, following progress in US-China trade talks, also impacted gold. Both nations agreed to lower tariffs—Washington reduced duties from 145% to 30%, while Beijing cut tariffs from 125% to 10%. This agreement, confirmed in a joint statement, eased trade tensions, dampening demand for safe-haven assets like gold.
Additionally, market expectations for US Federal Reserve rate cuts have been revised. Traders now anticipate only two rate cuts in 2025, down from the earlier projection of three, according to Prime Market Terminal data. This shift has further pressured gold prices.
Gold Price Outlook for the Week
While easing US-China trade tensions have softened gold’s appeal, investors remain cautious due to the vague details of the agreement. Any renewed friction could reignite market volatility, supporting gold prices.
Market focus this week will also be on key US economic indicators, particularly the Core Producer Price Index (PPI) and Consumer Price Index (CPI). These metrics are expected to reflect stability, though the lingering impact of US tariffs could influence results.
The Federal Reserve’s stance on monetary policy remains a critical factor. Last week, the Fed refrained from providing a clear timeline for interest rate cuts, maintaining market uncertainty. However, Fed Chair Jerome Powell is scheduled to speak this week, and any signals of concern over labor market trends could revive expectations of rate cuts, offering support for gold at lower levels.
Geopolitical Factors to Watch
Geopolitical tensions continue to play a pivotal role. Markets will monitor the potential Russia-Ukraine peace talks, with leaders expected to meet in Turkey on Thursday. However, the Russian president has yet to confirm his participation, and military clashes persist, keeping geopolitical risks elevated.
Seasonally, May and June are typically subdued months for gold, suggesting a possible consolidation phase in prices over the coming weeks.
Silver Price Outlook
Silver is expected to remain steady, with limited downside risks. The US-China trade agreement, if implemented successfully, could support silver prices, given its substantial industrial demand from sectors like electronics and solar manufacturing. Investors will watch for specific measures in the trade deal that could boost industrial trade flows, potentially benefiting silver.
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