Gold price has fallen significantly from the all-time high levels seen recently. Gold trades at $3,140, down from the all-time high level of $3,500 posted in April, a fall of over 10% from the record highs.
Gold price on Thursday has dropped by over 2% from the previous session and reached a five-week low, as easing global trade tensions continued to reduced demand for safe-haven assets.
President Trump mentioned continuing talks with South Korea, Japan, and India, as the US and China agreed to drastically reduce tariffs and started a 90-day truce to complete a larger agreement.
With India-Pakistan tensions normalizing and growing hope that Trump would relax sanctions on Syria during his Middle East visit, geopolitical risks also decreased.
Expectations for potential rate reduction by the Federal Reserve, which are generally supportive of non-yielding assets, were strengthened by lower-than-expected US inflation figures.
Gold price today in India is Rs 91,250, down by Rs 8,750, a fall of 8.75% from the lifetime high of Rs 1 lakh recorded on April 22. On MCX, the gold futures contracts for August, October, and December are, however, trading higher than the current gold prices.
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Gold is revered as the ‘God of Uncertain Times’, providing a secure haven during economic turmoil and high debt levels among central banks.
The latest change of events appears to have halted the world’s bleak economic outlook. The Trump administration is aggressively negotiating with other countries, and markets anticipate a lower tariff structure soon. Trump’s tone has shifted substantially, with suggestions of potential reconciliation with other trading partners besides China.
While many believe that there are many unsolved or unanswered concerns about tariffs and the US economy, equities look to be a better risk-off option in the current situation than remaining invested in gold. As the economy improves, gold will face continued selling pressure.