Gold forecast: Analysts see further correction as prices hit 1-month low
Gold June futures on MCX fell to Rs 90,890 per 10g, down 8.5% from peak, amid easing geopolitical tensions, weak U.S. data, and waning safe-haven demand.
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Why gold prices are falling
Easing geopolitical risk premium in the global market, shifting focus to Russia-Ukraine peace talks, U.S. retail sales data, producer inflation, and Federal Reserve policy.
Ongoing trade negotiations between the U.S., South Korea, Japan, and India, as well as a temporary trade truce between the U.S. and China.
Stabilizing geopolitical tensions between India and Pakistan, reducing safe-haven demand.
Lower-than-expected U.S. inflation data, raising prospects of potential rate cuts by the Federal Reserve, is another factor contributing to the easing of the gold price.
Technical outlook for gold
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Gold June futures contracts on the Multi Commodity Exchange (MCX) fell to a one-month low, touching Rs 90,890 per 10 grams in today's session. This decline marks a sharp pullback from the yellow metal's all-time high of Rs 99,358 per 10 grams, highlighting the volatility in gold prices amid changing market dynamics.The fall in gold prices marks a sharp decline of 1.5% just from its closing price on Wednesday, and a massive 8.5% from its peak price.The drop in gold prices has been largely attributed to easing geopolitical tensions and a decline in demand for safe-haven assets.Renisha Chainani, Head - Research at Augmont, cited that gold has broken the double-top neckline support, indicating potential downside risks in the near term."Prices are now expected to move towards the $3,000 - $3,050 range, equivalent to Rs 87,000 - Rs 88,000 per 10 grams," she stated.On the charts, Chainani stated, resistance is expected at Rs 92,350 - Rs 92,600, while support levels are marked at Rs 90,500 and Rs 89,700.Further, Pranav Mer, Vice President, EBG - Commodity & Currency Research at JM Financial Services, stated that gold prices are likely to see an extended corrective move as key chart supports are breached at $3190 in the international spot and Rs 92,000 on MCX.'Price decline remains supported by easing geopolitical risk premium in the global market. Now, in the session ahead, focus will be on Russia-Ukraine peace talks, U.S. data on retail sales, producer inflation, jobless claims and Fed chairman's speech,' Mer noted.On the charts, he said that resistance is seen at Rs 92,350-92,600, and downside support at Rs 90,500-Rs 89,700.
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