Gold prices declined sharply in domestic markets on Thursday, weighed down by a stronger US dollar and reduced geopolitical tensions. The MCX Gold June 5 contract traded at ₹91,450 per 10 grams around 12:10 PM, marking a 0.88% drop from the previous session. On Wednesday, the same contract had already fallen 1.5% to close at ₹92,265 per 10 grams.
The recent slide reflects fading safe-haven demand, as progress in US-China trade negotiations and easing India-Pakistan tensions shifted investor focus towards riskier assets. Over the past week, MCX Gold prices have dropped more than 3%.
US-China Talks, Dollar Strength Pressure Gold
Global gold and silver prices have been under pressure as diplomatic efforts between Washington and Beijing calmed market fears, diminishing the appeal of safe-haven metals. The reduced demand comes alongside a rebound in equities, further weighing on precious metals.
Manoj Kumar Jain, analyst at Prithvifinmart Commodity Research, noted, “Gold and silver prices could not sustain their earlier gains and slipped again as safe-haven demand weakened due to improving trade talks and broader risk aversion easing in global financial markets.”
Additionally, with US inflation stabilizing, expectations for aggressive rate cuts by the Federal Reserve have diminished. According to Bloomberg, San Francisco Fed President Mary Daly emphasized that the strength of the US economy allows policymakers to adopt a wait-and-watch approach regarding future rate adjustments.
Expert Strategy: Caution Advised for Precious Metals
Given the ongoing volatility, Jain advises investors to refrain from initiating fresh positions in gold and silver today. He expects price swings to continue, driven by fluctuations in the dollar index and upcoming key global economic data releases.
For the day, Jain projects gold support at $3,164–$3,140 per troy ounce, with resistance between $3,210–$3,234. Silver, meanwhile, finds support at $32.10–$31.80, and resistance at $32.74–$33.00 per troy ounce.
In the domestic futures market, MCX Gold is expected to find support at ₹91,770–₹91,360 and face resistance at ₹92,650–₹93,100. Silver support levels are seen at ₹94,800–₹94,200, while resistance is pegged at ₹96,000–₹96,650.
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