Gold prices edged higher in domestic and global markets on Friday, bolstered by mounting concerns over the United States’ fiscal trajectory and broader economic uncertainty. The uptick in gold was supported by a softer U.S. dollar and geopolitical tensions, though muted demand in the Indian spot market tempered gains.
On the Multi Commodity Exchange (MCX), June 5 gold futures contracts were trading 0.10% higher at ₹95,612 per 10 grams as of 9:10 AM IST. Despite recent volatility, analysts remain optimistic about gold’s outlook and advise investors to adopt a ‘buy on dips’ approach.
Global Cues Support Local Gains
Internationally, gold prices were on track to end the week with notable gains. The U.S. Dollar Index fell over 1% this week, its sharpest weekly decline since early April, making dollar-denominated assets like gold cheaper and more attractive to foreign investors.
Market sentiment has been rattled by renewed fears over the U.S. government’s growing debt burden. After Moody’s recent credit rating downgrade and the House of Representatives’ approval of a sweeping tax and spending package backed by former President Donald Trump, analysts warn that the U.S. fiscal deficit could widen significantly.
“Gold prices have remained relatively steady, even as risk assets like equities have come under pressure due to growing concerns over the rising U.S. budget deficit. This has driven Treasury yields higher,” said Aksha Kamboj, Vice President of the India Bullion and Jewellers Association and Executive Chairperson at Aspect Global Ventures.
Kamboj added that multiple factors could fuel a further rally in gold prices, including the potential implementation of Trump’s tax cuts and escalating geopolitical tensions involving Israel, Iran, and the Houthi movement in Yemen.
Analyst Strategies: Gold and Silver Outlook
Market experts anticipate ongoing price fluctuations in precious metals, influenced by developments in the U.S. economy, bond markets, and geopolitical flashpoints.
“We expect gold and silver prices to remain volatile amid fluctuations in the dollar index and global bond markets. Given this backdrop, we recommend a buy-on-dips strategy,” said Manoj Kumar Jain, Head of Commodity Research at Prithvifinmart.
According to Jain, the trading range for MCX gold today is expected between ₹94,600 and ₹96,650, while silver may fluctuate between ₹96,300 and ₹99,300 per kilogram. On the international front, gold is seen with support at $3,268–$3,240 per troy ounce and resistance at $3,334–$3,358, whereas silver is supported at $32.84–$32.40 and faces resistance at $33.55–$33.80.
Rahul Kalantri, Vice President of Commodities at Mehta Equities, echoed similar sentiments. He projected gold support levels at $3,278–$3,260, with resistance at $3,325–$3,345. In rupee terms, he noted gold support at ₹95,110–₹94,880 and resistance at ₹95,950–₹96,240. For silver, the support lies at ₹97,180–₹96,650, while resistance is seen at ₹98,950–₹99,750.
Market Sentiment Remains Bullish Amid Risks
While spot market demand in India remains tepid, analysts believe underlying factors—such as U.S. fiscal risks, global inflation concerns, and Middle East tensions—will continue to support the yellow metal in the medium term. The market’s attention now turns to upcoming U.S. economic indicators, including manufacturing and housing data, which could further shape investor sentiment.
With both global uncertainty and currency volatility in play, market participants are advised to remain cautious but opportunistic, using current corrections to accumulate positions in gold and silver.
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