Gold prices under pressure; analysts await key US macro data on interest rates, impacting precious metal trajectory. Geopolitical factors and dollar strength also influence gold prices.
Market sentiment has tilted away from safe-haven assets like gold amid fading geopolitical tensions and improving risk appetite towards riskier assets such as equities, they said.
Meanwhile, the US Federal Reserve remains cautious about interest rate cuts, as Fed Chair Jerome Powell during his testimony last week had said that while interest rate cuts are possible, they are not imminent. This has led to a recalibration of gold holdings globally, keeping prices under pressure.
On Friday, gold futures declined by Rs 1,563 or 1.61 per cent to close at Rs 95,524 per 10 grams on the Multi Commodity Exchange (MCX).
Jateen Trivedi, VP Research Analyst – Commodity and Currency at LKP Securities, said the outlook remains pressured due to waning geopolitical concerns, particularly in the Middle East, which reflects a shift in investor sentiment away from safe-haven assets towards riskier avenues like equities.
According to Trivedi, gold could move within the range Rs 93,000-97,500 per 10 grams mark on the MCX and USD 3,175-3,325-level in the international markets in the coming week.
The movement will largely depend on the tone of key US macroeconomic data including unemployment figures, non-farm payrolls, and the ADP employment report, he said, adding that any unforeseen geopolitical developments could also influence the sentiment.
Echoing a similar tone, NS Ramaswamy, Head of Commodities & CRM at Ventura, said gold has been struggling to breach the USD 3,300-mark in the overseas markets. The safe-haven demand has dampened and the only consolation is a weaker dollar, which is supporting the precious metal.
Ramaswamy highlighted that the dollar Index couldn’t get enough support from the US-China deal. However, there could be a positive impact to the yellow metal on a likely postponement of reciprocal tariffs from the July 9 deadline.
“While there is no clear consensus on a July Fed interest rate cut, market expectations remain tilted towards easing, which is supporting prices,” he said, adding that “plunging oil prices have eased inflation worries and bolstered risk sentiment, further dampening gold’s safe-haven appeal”.
Most catalysts currently remain bearish, with limited upside triggers unless there is a reversal in the dollar or a surprise from the US Federal Reserve, Ramaswamy added.