Gold prices dropped in the domestic futures market on Friday morning, reflecting volatility in global financial markets and fluctuating demand. On the Multi Commodity Exchange (MCX), gold futures for June delivery were trading 0.59% lower at ₹89,524 per 10 grams as of 9:40 AM.
The decline in gold prices was also observed in international markets, following a major trade policy announcement by US President Donald Trump. On April 2, Trump introduced reciprocal tariffs on over 180 countries and imposed a 10% baseline tariff on all imports to the United States. The move created turbulence across financial markets, prompting a sharp sell-off in both equities and safe-haven assets like gold.
Market Reaction and Investor Sentiment
Following Trump’s tariff announcement, gold prices slumped to their lowest in a week, while silver tumbled to a five-week low. US stock indices, the dollar index, and 10-year Treasury yields also saw a sharp decline.
Despite precious metals being exempt from the new tariffs, the overall negative market sentiment weighed on bullion prices. “Financial market instability has led to significant pressure on gold, despite its usual status as a safe-haven asset during uncertain times,” said Rahul Kalantri, Vice President of Commodities at Mehta Equities.
Analysts suggest that while economic uncertainty typically supports gold prices, concerns over rising inflation due to tariffs are also in play. If inflation remains high, the US Federal Reserve may hesitate to cut interest rates, which could further dampen gold’s appeal.
Key Support and Resistance Levels for Gold and Silver
Market experts provided insights into crucial price levels for gold and silver:
- Gold (International Market):
- Support: $3,072 – $3,040
- Resistance: $3,112 – $3,135
- Silver (International Market):
- Support: $31.28 – $31.00
- Resistance: $32.00 – $32.22
For Indian markets, Kalantri noted:
- Gold (MCX):
- Support: ₹89,960 – ₹89,350
- Resistance: ₹90,710 – ₹90,990
- Silver (MCX):
- Support: ₹93,600 – ₹92,550
- Resistance: ₹95,200 – ₹95,950
Outlook for the Coming Days
Manoj Kumar Jain, of Prithvifinmart Commodity Research, expects continued volatility in gold and silver prices due to fluctuations in the dollar index and uncertainties surrounding global trade policies. He advised traders to wait for more market stability before taking fresh positions.
Jain’s projections for Friday’s session are:
- Gold (International):
- Support: $3,088 – $3,044
- Resistance: $3,145 – $3,177
- Silver (International):
- Support: $31.40 – $30.88
- Resistance: $32.40 – $33.00
For MCX trading, Jain identified key levels:
- Gold:
- Support: ₹89,360 – ₹88,800
- Resistance: ₹90,700 – ₹91,200
- Silver:
- Support: ₹93,150 – ₹91,800
- Resistance: ₹95,200 – ₹96,600
With financial markets facing heightened volatility, gold and silver are likely to experience price fluctuations in the short term. Analysts recommend a cautious approach, keeping an eye on inflation trends and US Federal Reserve policies, which could influence the future trajectory of bullion prices.
