Spot gold dropped 0.8% to $3,213.56 per ounce as of 0429 GMT.
For the week, it is down 3.3%.
US gold futures slipped 0.3% to $3,217.20 an ounce.
In India, gold prices also declined. As of today, 24 karat gold trades at ₹9,513 per gram, 22 karat at ₹8,720, and 18 karat at ₹7,135, as per Goodreturns data.
The dollar rose 0.4% this week, on track for its fourth straight weekly gain. A stronger dollar makes dollar-priced gold more expensive for overseas buyers.
“Gold prices faced heavy selling pressure this week as markets cheered a de-escalation in the US-China trade war,” said Ilya Spivak, Head of Global Macro at Tastylive.
Earlier this week, the US and China agreed to ease tariffs imposed earlier this year, easing fears of a prolonged trade war. This reduced gold’s appeal as a hedge against geopolitical risk.
Meanwhile, US economic data showed mixed signals. Producer prices fell unexpectedly in April, while retail sales slowed. Consumer inflation also rose less than expected.
Federal Reserve Governor Michael Barr said the US economy remains strong and inflation is moving toward the 2% target. However, markets are still pricing in rate cuts starting September.
Lower interest rates support gold, which yields no interest. However, with rate-cut expectations cooling, gold’s upside looks limited in the short term.
According to Rahul Kalantri, VP Commodities at Mehta Equities:
- Support levels: Gold at $3,195–$3,175 an ounce
- Resistance levels: Gold at $3,245–$3,260 an ounce
Technical outlook
Axis Securities warned that gold is now threatening to break below its 50-day moving average for the first time since December 2024. This level has supported every dip since November.
“Gold prices are showing signs of stress as key macro shifts weigh on the metal,” said Axis. “A break below the $3,136 per ounce level could open the door to deeper declines toward $2,875–$2,950 per ounce.”
Between May 16 and May 20, price action will be critical. If gold fails to hold above its support band, a bigger correction may follow.
Investment take
Despite the recent price drop, analysts say investor interest in gold remains intact. Many are using the dip as a buying opportunity.
“Gold continues to be a preferred asset class, especially with the global economic and inflation outlook still uncertain,” said Tim Waterer, Chief Market Analyst at KCM Trade.
In India, the sentiment is similar.
“The decline in prices is a welcome development for long-term buyers, particularly ahead of the upcoming wedding season,” said Aksha Kamboj, Vice President, India Bullion and Jewellers Association (IBJA) and Executive Chairperson, Aspect Global Ventures.
She added that lower prices could benefit those investing in physical gold as part of their long-term strategy.
–With Reuters inputs