In India, gold dropped to ₹8,908 per gram for 999 purity and ₹8,873 for jewellery gold
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Gold prices continued to decline on Monday as investors sold off the precious metal holdings along with other asset classes to cover losses elsewhere. But, analysts are optimistic the yellow metal will rebound on haven demand.
At 1910 hours IST, gold slipped to $3,012.74 an ounce, a fall of nearly $25 from the weekend. In India, gold dropped to ₹8,908 per gram for 999 purity and ₹8,873 for jewellery gold.
On MCX, June gold futures decreased by ₹10 to ₹88,065 for 10 grams with a turnover of 16,515 lots. Silver prices, however, were up marginally at $29.86 per ounce.
Awry calculations
Suvankar Sen, MD & CEO, Senco Gold and Diamonds, said gold prices came under pressure as most investors accumulated gold on expectations that the US would levy tariffs on bullion imports from the UK. Their calculations went wrong, leading to the unwinding of these long positions.
“Gold frequently faces initial pressure during periods of heightened risk aversion. This is because market players frequently sell their gold holdings to make up for losses in other areas. Typically, gold recovers its losses quickly, and this time might be no exception,” said Renisha Chainani, Head- Research, Augmont – Gold for all.
Sen said the sudden fall in equity and commodity markets triggered margin calls and liquidation of positions in haven gold.
Jateen Trivedi, VP Research Analyst (Commodity and Currency), LKP Securities, said the sentiment remained cautious with investors looking for further clarity from the US on its next course of action, especially amid escalating trade tensions, he said.
Upside potential
“Gold remains boosted by escalating trade uncertainties, heightened geopolitical tensions, a weaker US dollar, increasing central bank purchases, and rising risks of recession,” said research agency BMI, a unit of Fitch Solutions.
RBC Capital Markets said it sees solid upside potential for gold, but the marketplace is overstretched. “In this environment, there is a potential for prices to test support around $2,821 per ounce,” it said.
“Gold still looks overvalued from a macro perspective, and the uncertainties that have propelled gold are inherently uncertain,” it said.
ING Think, the economic and financial analysis wing of Dutch multinational financial service firm ING, said, “… we believe this (gold’s plunge) should be short-lived, with escalating trade actions likely to continue to bolster safe-haven buying.
Germany-based Commerzbank said,”… inflation risks are rising in the US due to tariffs. This combination points towards a significantly lower real interest rate and therefore a higher gold price.”
Durable appeal
Augmont’s Chainani said in the short run, gold prices appear to have peaked at about $3200 (₹91,400/10 gm). A further sell-off towards $2900 (₹85,000) may occur if prices remain below $3,000 (₹8,8000). “If not, prices are predicted to settle this week between $3,000 ( ₹88,000) and $3100 (₹90,000),” she said.
RBC Capital Markets said it does not rule out the possibility of a correction from uncertainty-driven highs in gold. “It’s clear that economic sentiment has deteriorated, and gold’s appeal is more durable in this environment —meaning elevated prices should hold,” it said.
Trivedi said the RBI policy meeting later this week will be closely watched, as rupee volatility is likely to add another layer of uncertainty for MCX gold.
“In this backdrop, gold is expected to remain highly sensitive to both global cues and currency movement,” he said.
Chainani said silver will likely consolidate around $30 for some time. “At these levels, buying will likely resume because there is still a demand-supply imbalance, which will keep prices stable,” she said.
Published on April 7, 2025
