Can gold retain its glitter as Dalal Street gets back its glow?
Gold prices, which recently touched an all-time high of Rs 1 lakh, have started to come down as global conditions improve and stock markets recover. This shift has reduced the demand for gold as a safe investment, with investors now turning their attention back to equities.Just a week ago, gold was trading at record levels due to global uncertainty. Concerns over trade tensions, US tariffs, and geopolitical issues had pushed investors towards gold, a common choice during uncertain times. But now, things are changing.At the same time, stock markets have shown strong performance. The Sensex has crossed the 80,000 mark, and the Nifty has posted its best level in 2025 so far. As a result, investor confidence in equities has returned, lowering the appeal of gold.GOLD TO RETAIN ITS GLITTER?Trivesh, Chief Operating Officer of Tradejini, said that gold and stocks serve different purposes in an investment plan.'Gold has gone up by over 30% since Akshaya Tritiya 2024 and over 200% in the last ten years. The rise was mainly due to global market troubles, trade restrictions, and rising oil prices. In India, gold is not just an investment—it has cultural value and is seen as a sign of prosperity and security during festivals and family events.'He added that while gold had a strong rally, some correction is natural as global tensions ease. Still, gold remains a popular choice for protecting capital and reducing risk during uncertain times.On the other hand, equities provide growth. 'The Nifty 50 has bounced back by 12% from its April low. But now, market expectations are high. If company earnings do not meet these expectations, there could be a correction,' said Trivesh.He advised a balanced investment strategy. 'Gold protects you from market ups and downs. Equities help your money grow over time. Choosing the right mix depends on how much risk you can take and what your financial goals are.'advertisementWHY ARE GOLD PRICES FALLING?The recent fall in gold prices is mainly because of better global trade conditions.US Treasury Secretary Scott Bessent recently said that several major trading partners, including India, had come forward with strong proposals to avoid US tariffs. He added that a trade deal with India might be signed soon.
China has also decided to remove tariffs on some US goods, which is seen as a move to reduce tensions. At the same time, the US has said it will ease the impact of auto tariffs. These steps are expected to improve trade relations between large economies.Jateen Trivedi, Vice President and Research Analyst for Commodities and Currency at LKP Securities, said, 'The fall in gold demand came as the US began tariff talks with many countries. Hopes for a China-US trade deal and possible peace between Russia and Ukraine have also reduced the need for gold as a safe option.'advertisementHe explained that when global tensions fall, investors tend to move their money away from safe options like gold and into other investments that might offer better returns. This shift has pulled down gold prices both globally and in India. At one point, gold had climbed to $3,500.05 per ounce due to fears of a global slowdown and market uncertainty.MARKET OUTLOOK FOR GOLDRahul Kalantri, Vice President of Commodities at Mehta Equities, said gold prices dipped early Monday due to low demand in China. However, they recovered slightly later in the day due to global risk worries and some profit-taking in the US dollar.He said that recent border tensions between India and Pakistan, and attacks in Iran, briefly pushed gold prices up again. But the rise didn't last long.Kalantri shared current levels for gold and silver. He said gold has support at $3,310–$3,288 and resistance at $3,360–$3,378. In India, this means gold has support at Rs 95,450–Rs 95,080 and resistance at Rs 96,750–Rs 97,290. Silver is also facing pressure, with support at Rs 95,680–Rs 94,850 and resistance at Rs 97,150–Rs 97,950.Dr. Renisha Chainani, Head of Research at Augmont, said that gold prices could rise again if a new global issue appears. She said that if gold moves above $3,380 (about Rs 96,400), it could go up to $3,435 (around Rs 97,400), and possibly reach $3,500 again (about Rs 99,400).advertisement(Disclaimer: The views, opinions, recommendations, and suggestions expressed by experts/brokerages in this article are their own and do not reflect the views of the India Today Group. It is advisable to consult a qualified broker or financial advisor before making any actual investment or trading choices.)
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