Yellow Metal Down Rs 7k From Record High On MCX: Is it good time to buy gold?

Mumbai: Gold prices have seen a sharp decline of more than ₹7,000 per 10 grams in the past 10 days, retreating from their all-time high of ₹1,00,484 recorded on April 22, 2025, to ₹93,300 on the Multi Commodity Exchange (MCX) as on Friday.

However, Friday’s price marked a rebound of ₹950 from Thursday’s rate of ₹92,325, indicating a strong recovery in prices following a minor gap-up opening.

In international markets, Comex gold maintained crucial support near $3,200, with sentiment stabilising amid uncertainty over a US-led trade deal. This lack of clarity has led to short-covering by market participants, bolstering the precious metal’s momentum.

Analysts remain bullish on gold for 2025, citing global geopolitical tensions, inflation concerns in the US, and continued central bank buying as key drivers of long-term demand.

Gold prices are expected to rise amid uncertainties around ongoing trade discussions, providing fresh upside momentum, according to experts.

The easing of global trade tensions reduced demand for safe-haven assets, prompting investors to cash in gains. US President Donald Trump’s indications of potential trade agreements with South Korea, Japan, and India, along with optimistic comments regarding a deal with China, sparked a shift in market sentiments, experts said.

According to US Treasury Secretary Scott Bessent, several major trading partners have made “very good” offers to avoid US tariffs, with India expected to be among the first to finalise a deal.

US Federal Reserve policymakers have signalled that short-term interest rates will remain unchanged as they wait for clearer signs that inflation is nearing the US central bank's 2% goal or until there is a whiff of a deteriorating job market, according to a Reuters report. Elevated interest rates diminish the appeal of non-interest-yielding assets like gold.

Can gold prices fall more?

Against this backdrop, analysts largely believe the best of the gold rally is already over and the yellow metal is set to face more corrections.

Experts explain that the jump in gold prices from ₹90,000 to ₹99,000 in a matter of three days was a euphoric rally, which generally happens when any asset class is in a bubble phase. "No central banks bought gold during that period. India’s and China’s jewellery demand remained sluggish. It was just the fear factor — that the 145% tariff on China would lead to a sharp slowdown in the world’s top two economies. There were recessionary concerns globally, and all those fears led to that parabolic move," they highlighted.

The experts say that this kind of move takes place once in a decade, and we have likely already seen the peak, as far as the highs are concerned. They believes that the profit taking in gold will continue as all the positive factors that could drive gold higher are already discounted in the price.

Is it time to buy silver?

As weakness in gold is expected to persist, and with the gold-silver ratio staying elevated, analysts are turning bullish on the white metal.

They say that when gold prices decline, silver typically follows suit—though not always to the same degree—since a downturn in gold often weighs on silver. He noted that silver prices are currently subdued due to high tariffs on solar panels, which have reduced exports from China to the US.

These exports account for approximately 18% of global solar panel trade. Given that the solar sector has been a key driver of silver demand, especially with its double-digit growth in recent years, the tariff impact has temporarily softened silver prices.

They, however, believe that this trend is likely to be short-lived. Any constructive deal between the US and China — even just sitting down for negotiations — could lead to an upside in silver, they add.