Gold rally pauses as US-China trade tension eases

After a prolonged rally, gold prices slipped by ₹485 per 10 gram on Wednesday to ₹93,859 against ₹94,344 in line with the global market trend.

The yellow metal opened weak at ₹93,776 per 10 gram (24-carat) against Tuesday’s close of ₹94,344. The demand has remained lacklustre for the last few months due to the volatile price trend.

Gold prices have rallied from ₹98,102 per 10 gram on April 15 to ₹98,484 on April 22 and dipped to a low of ₹93,076 on Monday. In the global market, gold has dropped from a record $3,426.1 an ounce to $3,182 on Wednesday. Gold prices in the US were down $21 on Tuesday to $3,230 an ounce after the US eased trade tensions with major economies securing trade agreements with the US.

15% volume dip?

Suvankar Sen, MD & CEO, Senco Gold, said though gold prices may take intermittent breather, it will continue with its bullish trend as long as uncertainties and issues around the global trade war are not solved.

“We expect gold demand in volume term to fall 15 per cent even while registering a healthy growth in value due to run-up in prices,” he said.

Currently, he added jewellery demand is restricted to need based for weddings, gifting or any other special occasions while impulsive buying is yet to resume.

Prithviraj Kothari, Managing Director, RiddiSiddhi Bullions, said there has been extreme fluctuation in gold prices, rising to $3,500 per ounce in April and retreating to about $3,210 as of mid-May due to thawing US-China trade tensions and dimming the safe-haven appeal of gold.

Uncertainty persists

“Our forecasts indicate gold prices will regain in its lost glory and remain volatile as long as global and economic issues remain uncertain. Investors should keep themselves abreast of global events and add gold to portfolio as part of diversification,” he said.

Renisha Chainani, head – research at Augmont, said following the US and China’s agreement to significantly reduce tariffs, gold fell to its lowest level in almost a month. However, it recovered slightly as a result of ongoing uncertainty surrounding the direction of trade talks.

Chintan Mehta, Chief Executive Officer, Abans Financial Services, said China is the latest to strike a deal, as both countries agreed to a 90-day reduction in tariffs on each other’s goods.

$200 decline likely

Kaynat Chainwala, AVP of Commodity Research, Kotak Securities, said gold price trend is supported by further signs of easing US-China trade tensions after the Trump administration announced plans to lower the “de minimis” tariff threshold for low-value Chinese shipments to as low as 30 per cent.

Chainani said gold prices may see a $200 decline to $3,000 (~₹86,000) if prices break and hold below $3,200, which is the Double Top formation’s neckline support.

However, silver prices are expected to gain momentum now, as the tariff war has de-escalated. “We are likely to see prices touching $34 (~₹99,000) and $35 (~₹1,02,0000) soon in the coming days,” she said.

Published on May 14, 2025