Gold Sees Biggest Fall in 10 Months as Traders Shift from Safe-Haven Assets Amid Easing US-China Trade Tensions
The plunge came as investors shifted away from safe-haven assets following signs of easing trade tensions between the United States and China.
New Delhi: Gold prices witnessed a sharp drop of ₹3,400 on Monday, falling to ₹96,550 per 10 grams in the national capital. The plunge came as investors shifted away from safe-haven assets following signs of easing trade tensions between the United States and China.
According to the All India Sarafa Association, gold of 99.5% purity fell to ₹96,100 per 10 grams, marking the steepest decline since July 23, 2024, when prices had dropped by ₹3,350.
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On Saturday, gold prices stood at ₹99,950 for 99.9% purity and ₹99,500 for 99.5% purity per 10 grams.
US-China Tariff Pause Triggers Profit Booking
The dramatic fall followed news of a 90-day tariff pause between the US and China after trade talks concluded in Geneva over the weekend. As part of the agreement, the US agreed to reduce its 145% tariff on Chinese goods to 30%, while China lowered its tariffs on US goods to 10%.
“Gold prices fell sharply amid signs of progress in trade talks between the US and China, along with some relief in geopolitical tensions, including India-Pakistan,” said Rahul Kalantri, VP Commodities at Mehta Equities Ltd.
Silver Prices Also Slide
Silver prices also followed suit, dropping ₹200 to ₹99,700 per kg in the domestic market, compared to Saturday’s closing price of ₹99,900.
On the Multi Commodity Exchange (MCX), silver contracts for July delivery fell ₹2,295 or 2.37% to ₹94,434 per kg.
Futures and Global Prices Reflect Sharp Declines
In futures trading, gold’s most active contract on the MCX slumped by ₹3,932 or 4.07%, trading at ₹92,586 per 10 grams. In global markets, spot gold fell over 3% to USD 3,218.70 per ounce, while spot silver declined by 1.19% to USD 32.33 per ounce.
Jateen Trivedi, VP – Research Analyst (Commodity & Currency) at LKP Securities, noted that profit booking occurred amid reduced geopolitical risks and signs of truces involving Russia-Ukraine and India-Pakistan.
Stronger Dollar and Stock Market Rally Weigh on Gold
Adding to the downward pressure, the US dollar index rose by 1.42% to 101.76, making gold less attractive to foreign investors. A strong rally in equity markets further dented gold’s appeal as a safe-haven asset.
“Gold dips more than 2% on long-liquidation and profit-booking amid easing geopolitical tensions and recovery in the greenback,” said Pranav Mer, Vice President at JM Financial Services.
Eyes on US Economic Data and Fed Comments
Looking ahead, market participants will monitor upcoming US macroeconomic data, including inflation, retail sales, and consumer sentiment. All eyes will also be on US Federal Reserve Chair Jerome Powell’s speech later this week for further cues on interest rate direction.
