Gold prices rose on MCX as the US dollar weakened and economic indicators turned negative. Experts advise waiting for further correction before investing in gold.
Gold prices edged higher in the domestic futures market on Friday morning, buoyed by a weakening US dollar and soft macroeconomic indicators pointing to a slowdown in the US economy. At around 9:20 AM, MCX Gold June 5 contracts traded 0.46% higher at ₹92,768 per 10 grams.
The recent uptick comes as the dollar index dipped nearly 0.30%, making gold cheaper in other currencies and increasing its global demand.
US Economy Contracts as Trade War Tensions Ease
According to Reuters, the US economy contracted for the first time in three years in Q1CY25, shrinking at a 0.3% annualised rate. Additionally, US manufacturing remained weak for a second consecutive month, with the ISM manufacturing PMI falling to 48.7 in April, down from 49.0 in March.
This economic decline is partly attributed to the ongoing trade war initiated by President Donald Trump’s tariff policies, which have disrupted supply chains, raised business costs, and led to job losses.
Gold Retreats from All-Time High as Investors Eye Equities
Despite Friday’s gains, MCX Gold had previously fallen ₹7,000 from its record high of ₹99,358 per 10 grams (April 22), due to easing trade tensions and improved investor appetite for risk. President Trump recently hinted at progress in trade negotiations with India, Japan, South Korea, and China, reducing safe-haven demand for gold.
A Chinese-affiliated social media platform reported that the US reached out to China to reopen talks over Trump’s 145% tariffs, which further improved market sentiment.
Is Now the Right Time to Buy Gold? Experts Urge Caution
Analysts advise waiting for further corrections before entering the market.
Anuj Gupta, Head of Commodities & Currency at HDFC Securities, suggested: “Wait for some more corrections. Buy MCX Gold around ₹90,000 level.”
He maintained a year-end target of ₹97,000–₹98,000 per 10 grams.
Manoj Kumar Jain of Prithvifinmart Commodity Research echoed a similar strategy: “We suggest buying gold around ₹92,200 with a stop loss of ₹91,780 for a target of ₹93,000.”
Gold and Silver Price Levels to Watch
According to Jain (via Mint), gold and silver are expected to trade within the following technical ranges:
-
Gold (Comex):
Support – $3,200–$3,180 | Resistance – $3,250–$3,280 per troy ounce -
Silver (Comex):
Support – $31.84–$31.40 | Resistance – $32.50–$32.88 per troy ounce -
MCX Gold:
Support – ₹91,800–₹91,150 | Resistance – ₹92,720–₹93,200 -
MCX Silver:
Support – ₹94,000–₹93,350 | Resistance – ₹95,200–₹96,000
Long-Term Outlook: Gold Still a Safe Bet?
In the medium to long term, analysts remain bullish on gold due to central bank buying, geopolitical tensions, stagflation risks, and continued trade uncertainties in the US.
Experts also recommend investing in Gold ETFs for those seeking low-cost, flexible exposure to the precious metal without physical storage concerns.
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