Gold prices suddenly fell by over 4% today: Here's why
What's the story
Today, gold futures on the Multi Commodity Exchange (MCX) fell sharply by more than 4%.
The decline came as investors moved their attention from safe-haven assets to riskier investments, following a rise in global markets.
The June 2025 contract for gold futures fell by ₹3,930 in India to end at ₹92,588 per 10g.
Market analysis
Global events impact gold prices
Jateen Trivedi, VP Research Analyst of Commodity and Currency at LKP Securities, credited the sharp decline in gold prices to a number of global events.
He said tariff relief measures and de-escalation efforts between India-Pakistan as well as Russia-Ukraine have greatly impacted the precious metal's market value.
These developments prompted investors to book profits in gold, which had previously witnessed a surge due to global uncertainty.
Dynamics
Tariff reductions affect gold's appeal
Further explaining the impact of tariff reductions on gold prices, Trivedi noted that the US and China agreed to lower tariffs by 10% on US products and 30% on Chinese goods for a three-month period, to facilitate ongoing trade negotiations.
The announcement led to a significant rally in the Dollar index, which surged above $101.50, thereby reducing gold's appeal as a safe-haven asset.
Forecast
Future predictions for gold prices
Looking ahead, Trivedi predicted that gold now has resistance in the ₹94,000-₹95,000 range. He also said that the next support level is at ₹90,000. "With safe-haven demand fading, further downside cannot be ruled out if global risk sentiment remains stable," he added.