Gold likely to trade firm next week on weak dollar, global risks: Analysts

Business Standard

13-07-2025

Gold prices are likely to trade firm in the coming week supported by global risk aversion, persistent weakness in the US dollar index, and a flurry of trade-related developments, analysts said.
Investors will closely monitor the release of US Consumer Price Inflation (CPI) and retail sale data, which could in turn provide more direction for the bullion prices, they added.
Jateen Trivedi, VP Research Analyst, Commodity and Currency at LKP Securities, said gold is expected to trade strong in the coming week as long as it sustains above Rs 97,000 per 10 grams on the MCX.
"Renewed trade tariff jitters and continued weakness in the dollar index are amplifying global risk aversion, prompting a shift away from risky assets toward safe-haven instruments like bullion," Trivedi noted, adding that a weak rupee could further aid upside momentum in the gold prices.
Last week, the yellow metal futures for August delivery climbed Rs 842, or 0.86 per cent, on the Multi Commodity Exchange (MCX).
Hareesh V, Head of Commodity Research, Geojit Investments, said the yellow metal started the week on a weaker note as easing tensions between Israel and Iran and better-than-expected US non-farm payrolls data dampened safe-haven demand.
However, prices rebounded after US President Donald Trump imposed fresh tariffs ranging between 35 and 50 per cent on Canada and Brazil, reviving concerns of a full-blown trade war and boosting bullion demand.
Traders are closely watching the ongoing negotiations between India and the US over a potential trade deal, which could influence sentiment, Hareesh V added.
According to Prathamesh Mallya, DVP, Research, Non-Agri Commodities and Currencies at Angel One, gold prices have surged nearly 3 per cent on the MCX, rising from Rs 94,951 per 10 grams on June 27 to close on Rs 97,830 per 10 grams on July 11.
Meanwhile, Comex gold futures in the international markets have jumped nearly 2.8 per cent in the same period.
Mallya attributed the gains to the Trump administration's aggressive tariff measures on commodities, including copper, aluminium, and pharmaceuticals.
President Trump's indication that he will not extend the August 1 tariff deadline has intensified market uncertainty.
Gold typically performs well during such periods of elevated risk, Mallya said, projecting a possible move toward USD 3,500 per ounce and Rs 1,00,000 per 10 grams on MCX in the near term.
On Friday, Comex gold futures for August delivery rose USD 38.30, or 1.15 per cent, to close at USD 3,364 per ounce.
N S Ramaswamy, Head of Commodities and CRM at Ventura, said gold's key resistance of USD 3,360 has been tested and a decisive break will establish further rally and unlock its potential, despite headwinds of US dollar remaining firm and on recovery path.
The geopolitical concerns, including possible US sanctions on Russia and the threat of additional tariffs, could keep the safe-haven appeal of gold intact, Ramaswamy added.