Gold prices continued their upward trajectory on Monday as mounting global economic uncertainties fueled a rush towards safe-haven assets. In early trade, MCX Gold touched Rs 96,747 per 10 grams, reflecting heightened investor anxiety driven by the escalating US-China trade tensions and a weakening US dollar.
By 10:07 a.m., the June 5 MCX contract was trading at Rs 96,423, marking a 1.23% increase from the previous session’s close.
In global markets, spot gold soared to a fresh record high of $3,384 per ounce during the session, buoyed by widespread risk aversion and growing demand for assets perceived as safe in times of turmoil.
A significant catalyst behind the rally is the dollar’s continued decline. The dollar index has fallen to a three-year low, making gold more attractive to non-US investors. As gold is priced in dollars, a weaker greenback typically boosts its global demand.
Monday’s surge followed a modest setback in the previous session when MCX Gold fell 0.44% to Rs 95,239 due to profit-booking. Nevertheless, the broader market narrative remains shaped by geopolitical and macroeconomic anxieties—chief among them the fear that an intensifying US-China trade war could severely impact global growth prospects.
President Donald Trump’s recent decision to delay reciprocal tariffs has done little to ease investor concerns, as his administration maintains a hardline stance against China. Political developments in Washington have added further uncertainty, with reports suggesting Trump may be considering removing US Federal Reserve Chair Jerome Powell—an action that could undermine the Fed’s independence and roil financial markets.
What Should Investors Do Now?
Jateen Trivedi, Vice President and Research Analyst at LKP Securities, urged caution, noting that gold prices are struggling to decisively breach key resistance levels. “Gold prices showed signs of fatigue, slipping below recent highs and struggling to break past the key resistance at $3,350,” he said.
According to Trivedi, strong support lies between $3,280 and $3,290, and a break below that range could prompt a correction toward $3,150. “Volatility remains high at these elevated levels,” he added, advising investors to tread carefully before taking fresh positions.
Echoing a generally bullish longer-term outlook, Satish Dondapati, Fund Manager at Kotak Mahindra Asset Management Company, emphasized that fundamental factors continue to favor gold. “Gold has already gained over 25 percent this year, including a 6 percent rise since April 2 following the latest US tariff announcements,” he noted.
While near-term movements will likely hinge on the trajectory of trade negotiations, Dondapati believes central bank buying and persistent geopolitical risks will underpin gold prices over the longer term.
However, not all experts share immediate optimism.
Manoj Kumar Jain of Prithvifinmart Commodity Research advised a cautious, wait-and-watch approach. “We expect gold and silver prices to remain volatile this week and suggest staying away from fresh positions amid speculation around the US-China trade deal negotiations,” Jain told Livemint.
He identified immediate support for MCX Gold at Rs 94,750, with resistance around Rs 96,000.
As gold continues its record-breaking ascent, it reflects a global environment fraught with uncertainty. For investors, navigating the precious metals market will require careful attention to risk appetite, portfolio balance, and, above all, timing.
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