Gold Prices May Fall Below Rs 85,000 In 2 Months: What's Behind The Big Decline?
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Gold prices may fall by 12-15% in the next two months, says Quant Mutual Fund. Currently, 24-carat gold is Rs 98,500 per 10 grams in Delhi.
Gold Rate Prediction: After an impressive upside move in the past few months, gold prices might fall by 12-15% in the next two months, according to brokerage house Quant Mutual Fund. Currently, the price of 24-carat gold stands at Rs 98,500 (without 3% GST) per 10 grams in Delhi.
'Gold has peaked out and has the potential to correct by 12-15% in dollar terms over the next two months. 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," Quant Mutual Fund stated in its latest 'Factsheet for June 2025'.
A US-based Morningstar analyst has already forecasted a 38% decline over the next few years. If this becomes true, gold prices in India could plummet to Rs 56,000 per 10 grams. John Mills has provided several significant reasons for this anticipated drop in gold prices. An increase in supply is one of the reasons for the expected fall in gold prices.
Gold prices have jumped over 34% this year, surpassing other asset classes in gains. The bullion rates have jumped in the past few months due to increased investor demand for safe-haven assets amid escalating geopolitical and economic uncertainties. Investor sentiment turned defensive on the back of US President Donald Trump's tariff decisions, rekindling trade war concerns with China. Escalating tensions in the Russia-Ukraine conflict further strengthened the safe-haven demand.
The price rise is adversely affecting retailers. According to the India Bullion & Jewellers Association (IBJA), gold jewellery sales in India dropped 30% to 1,600 kg on average in the past fortnight.
After the 15% decline (as anticipated by Quant MF), gold prices might fall below Rs 85,000 per 10 grams.
In the international market, spot gold was up 0.3% at $3,361.73 an ounce, as of 1003 GMT. US gold futures firmed 0.3% to $3,385.80.
US President Donald Trump doubled its tariffs on steel and aluminium imports on Wednesday, the same day the Trump administration expects trading partners to make 'best offers" to avoid other punishing import levies from taking effect in early July.
He said that Chinese President Xi Jinping is tough and 'extremely hard to make a deal with," days after the US President accused China of violating an agreement to roll back tariffs and trade restrictions.
The focus will be on Friday's US non-farm payrolls data for more cues on the Federal Reserve's policy path. Fed officials have reiterated their cautious policy stance, citing risks from trade tensions and economic uncertainty.
'If the data is stronger than expected, interest rate cut expectations are likely to wane, which would weigh on the gold price," said Commerzbank analyst Carsten Fritsch, as per Reuters.
'We see gold trading in a range between $3,300 and $3,400 per troy ounce in the short term."
Gold, a safe-haven asset during times of political and economic uncertainty, tends to thrive in a low-interest-rate environment.
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