Gold Prices Dip as US-UK Trade Deal Fuels Optimism
Gold Prices Slip on Positive Trade News
Gold prices saw a dip in the domestic futures market on Friday morning, tracking weaker global trends and softening demand in the domestic spot market. MCX Gold June 5 contracts were down by 0.24%, trading at ₹95,940 per 10 grams around 9:10 AM.
US-UK Trade Deal Dampens Gold’s Safe-Haven Appeal
The decline in international gold prices comes after US President Donald Trump announced a trade deal with the UK. This news has eased concerns about a global trade war and increased expectations of trade agreements with major economies like China, India, and Japan. As a result, gold, often seen as a safe haven asset during times of economic uncertainty, is losing some of its appeal.
Jigar Trivedi, Senior Research Analyst at Reliance Securities, commented, “Gold prices declined to approximately $3,300 per troy ounce, pressured by a firmer US dollar and easing investor demand for the non-yielding asset amid improving global trade sentiment.”
Other Factors Influencing Gold Prices
Besides the US-UK trade deal, a stable US dollar and diminishing hopes of an early rate cut by the US Federal Reserve are also putting pressure on gold prices. Reuters reported that the US dollar looked set for a weekly gain on most major peers on Friday, fueled by optimism surrounding the US-UK trade deal and expectations of progress in US-China trade talks.
The Federal Reserve, in its May 7 statement, indicated that it is in no hurry to cut interest rates due to concerns about rising inflation.
Outlook for MCX Gold and Silver
Rahul Kalantri, VP of commodities at Mehta Equities, provided support and resistance levels for MCX Gold and Silver. He stated that gold has support at $3,265-3,240 and resistance at $3,310-3,340. Silver, on the other hand, has support at $31.90-31.65 and resistance at $32.50-32.70.
In INR terms, gold has support at ₹95,550-94,980 and resistance at ₹96,650-97,040. Silver has support at ₹95,380-94,550 and resistance at ₹97,250-97,950.
Trivedi of Reliance Securities believes the outlook for MCX Gold June futures is bearish, driven by the dollar index reaching 100. He expects MCX Gold June to potentially decline further, testing support at ₹95,800 per 10 grams.
