Gold prices may have hit their peak and could decline by 12–15 per cent in dollar terms over the next two months, according to Quant Mutual Fund. “However, our medium-term and long-term views are equally constructive and we reiterate that a meaningful percentage of your portfolio should be dedicated towards precious metals,” it added. A US-based Morningstar analyst has already forecasted a 38 per cent drop in the next few years.
On Tuesday, retail gold prices hovered around Rs 96,960 per 10 gm. With a 3 per cent goods and services tax, the price of 10 gm of gold stood at Rs 99,868.
Kavita Chacko, research head of India at World Gold Council, said stability in prices could prompt a resurgence in demand in the world’s second-largest consumer of the yellow metal.
The rise in gold prices is hurting retailers. Gold jewellery sales in India fell 30 per cent to 1,600 kg on average in the past fortnight, according to the India Bullion & Jewellers Association (IBJA), as prices shot up nearly 5 per cent .
“In the first fortnight of May, which was followed by Akshaya Tritiya, there was some momentum as prices started falling, touching Rs 92,365 per 10 gm on May 15. But since then, the price of the yellow metal has again started to move northwards, which has dampened the demand,” said Surendra Mehta, national secretary, IBJA.
Gold’s recent rally was fueled by economic uncertainty, inflation concerns, and geopolitical tensions. Investors turned to gold as a safe asset, particularly amid ongoing trade disputes initiated during former US President Donald Trump’s tenure. However, multiple factors could now drive prices downward.
US trade tensions influencing gold markets
Trade tensions between the United States and China are keeping investors on edge. Market participants are now watching closely for a possible call this week between President Donald Trump and Chinese President Xi Jinping. This comes just days after Trump accused China of violating an agreement to reduce tariffs and trade barriers.
In Europe, the European Commission has pushed back, stating it will urge the U.S. to lower or eliminate tariffs. However, the U.S. is still moving ahead with plans to double steel and aluminum tariffs to 50 per cent . According to a draft letter seen by Reuters, Washington is also pressing countries to submit revised trade offers by Wednesday to speed up negotiations before a five-week deadline.
