Spot gold was flat at $3,230.99 an ounce at 03:09 GMT.
US gold futures rose marginally by 0.2% to $3,235.20 an ounce.
In India, 24-karat gold was priced at ₹9,562 per gram, 22-karat at ₹8,765, and 18-karat at ₹7,172, according to Goodreturns.
Key factors behind the fall
The drop in gold prices was triggered by multiple global developments:
US-China tariff truce: The two countries agreed to reduce reciprocal tariffs for 90 days. The US slashed import duties from 145% to 30%, and China cut its tariffs from 125% to 10%.
Ceasefires and truce talks:
A ceasefire between India and Pakistan, and signs of a Russia-Ukraine truce further eased geopolitical risks.
Stronger dollar and equities: The dollar index surged past 101.50, while global equities rallied, reducing the appeal of safe-haven assets like gold.
“Gold crashes ₹4,000 per 10 grams, the first time since July 23 Budget Discount Day, as global tensions ease,” said Jateen Trivedi, VP Research Analyst – Commodity and Currency, LKP Securities.
He added, “With safe-haven demand fading, further downside cannot be ruled out if global risk sentiment remains stable. Technical support lies at ₹90,000 per 10 grams, with resistance near ₹94,000–₹95,000 per 10 grams.”
Outlook: More pressure ahead?
Analysts expect gold to consolidate in the near term. Citi has revised its 0–3 month price target down to $3,150 an ounce, expecting prices to remain in the $3,000–$3,300 an ounce range.
“The prospect of better trade relations between the world’s two largest economies has caused a pick-up in risk appetite and a pullback in safe haven demand,” said Tim Waterer, Chief Market Analyst at KCM Trade.
However, Waterer noted that a consolidation in the dollar allowed a mild rebound in gold prices. “Buyers may still be tempted on pullbacks, given that economic and geopolitical risks haven’t fully disappeared.”
With the US CPI report due later today and a 55-basis-point Fed rate cut expected later this year, traders will watch for fresh cues on interest rate direction. Lower rates typically support gold, but stable geopolitics may limit upside.
