Gold prices dip amid global profit booking and easing macroeconomic tensions. Experts suggest MCX buying strategy ahead of wedding season demand.
16 May 2025, Gold prices slipped on Friday in the domestic futures market, weighed down by a stronger dollar and easing global trade tensions. The MCX Gold June 5 contract was trading 0.41% lower at ₹92,790 per 10 grams at around 9:15 AM.
Globally, gold is on track to post its largest weekly decline in six months, with international prices pressured by profit booking and a softening in geopolitical and trade-related risks.
Key Drivers Behind the Decline:
- Dollar Volatility: A firmer US dollar has reduced the appeal of gold as a safe-haven asset.
- Fading Trade War Risks: Recent progress in US-China and US-UK trade negotiations has curbed bullion demand.
- Fed Policy Caution: Weakening expectations of interest rate cuts by the US Federal Reserve also weighed on prices.
Federal Reserve Governor Michael Barr noted that inflation in the US is trending toward the 2% target, reducing the urgency for monetary easing. The US Consumer Price Index (CPI) rose by 0.2% in April, marking the smallest annual increase in four years.
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Gold and Silver – Expert Technical View
Manoj Kumar Jain (Prithvifinmart Commodity Research):
- Gold Support (COMEX): $3,200–3,174
- Gold Resistance (COMEX): $3,250–3,280
- Silver Support: $32.40–32.10
- Silver Resistance: $33.00–33.30
- Gold Support (MCX): ₹92,550–92,000
- Gold Resistance (MCX): ₹93,660–94,140
- Silver Support (MCX): ₹95,300–94,500
- Silver Resistance (MCX): ₹96,650–97,400
Trade Idea:
“Buy silver around ₹95,500 with a stop-loss of ₹95,000 and target of ₹96,650,” recommends Jain.
India Bullion Association’s Outlook
According to Aksha Kamboj, VP of India Bullion and Jewellers Association (IBJA), “The easing of US-China tariff tensions, Ukraine conflict de-escalation, and relative calm in equity markets have softened gold’s momentum. However, the current decline is favorable for long-term Indian investors, especially with the wedding season approaching.”
Outlook & Market Sentiment
Despite a 2% drop in domestic spot prices this month, gold remains up over 21% year-to-date, reinforcing its strength as a long-term hedge. Experts suggest maintaining a “buy on dips” strategy given global uncertainties and seasonal demand uptick.
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