Gold prices have witnessed heightened volatility amid global economic uncertainty and shifting geopolitical dynamics. After recently touching lifetime highs, gold has since retreated, prompting investors to question whether prices could dip below ₹90,000 per 10 grams and whether it’s time to buy or sell.
According to Maneesh Sharma, AVP – Commodities & Currencies at Anand Rathi Shares and Stock Brokers, the market is currently navigating mixed cues, both geopolitical and economic.
Global Trends and Economic Indicators
Last week, spot gold prices fell nearly 3%, hitting a low of $3,120 per ounce before recovering to end the week above $3,200. Sentiment was dented following a preliminary US-China trade deal, which included significant tariff reductions. The US cut duties on Chinese goods from 145% to 30%, while China reduced tariffs on US imports from 125% to 10%.
Despite these developments, broader macroeconomic indicators remain mixed. US consumer sentiment recorded its second-lowest reading on record, which helped lift gold prices later in the week.
Meanwhile, concerns over US fiscal health intensified after Moody’s downgraded the country’s credit rating from Aaa to Aa1, citing ballooning debt levels and rising interest payments. The move follows similar actions by Fitch Ratings in 2023 and S&P in 2011. Moody’s now projects US federal debt to reach approximately 134% of GDP by 2035, up from 98% in 2023, with the fiscal deficit forecast to approach 9% of GDP.
Geopolitical Developments Add to Uncertainty
On the geopolitical front, tensions remain unresolved. Former US President Donald Trump recently called for Russia and Ukraine to begin ceasefire negotiations, but his proposal lacked pressure on Moscow and included no timeline—casting doubt on any imminent resolution.
Forecast and Investment Strategy
Looking ahead, Sharma notes that concerns over the US economy and potential Federal Reserve rate cuts are underpinning bullish sentiment for gold. However, the outlook remains cautious.
“The market is now focused on upcoming comments from several Federal Reserve officials,” Sharma said. “While some policymakers, including New York Fed President John Williams, have signaled a reluctance to cut rates before September, current market pricing suggests around 55 basis points of easing by year-end.”
Technically, spot gold is expected to find strong support in the $3,080–$3,150 range. While the trend remains sideways with a slight upward bias, intermittent profit booking is likely at higher levels.
Domestic Market Outlook
On the Multi Commodity Exchange (MCX), gold futures for June delivery (current market price ₹93,530 per 10 grams) are expected to trade within a wide band of ₹89,500 to ₹95,800 this week. Sharma advises that a short position should be considered only if prices close below ₹92,300, with downside targets at ₹91,000 and ₹89,500.
Weekly View: Sideways Trend
In summary, the gold market may continue to trade sideways in the near term, with key support levels providing buying interest and global cues likely to dictate short-term direction.
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