Gold Bull Run Over? Here's Why the Yellow Metal is Losing its Shine

It seems that the gold rally has come to a halt, as the price of the yellow metal continues to take a faltering tone. With easing geopolitical tensions and investors turning to profit-booking, the safe-haven asset appears to be losing its shine on the exchange. The rate of 24-carat gold (per 10 grams) witnessed another sharp decline on Thursday, with prices falling to Rs 94,080, down by around Rs 2,130 in the Delhi region, according to GoodReturns.

Just a few weeks back, the price of gold had surpassed the psychological Rs 1 lakh (per 10 grams) mark as trade war tensions due to US tariffs dampened the overall mood. On top of that, the border tensions between India and Pakistan also increased the demand for safe-haven asset.

However, as the macro concerns fade and the tariff negotiations between the US and China take a balanced tone, investors are turning away from gold. As per analysts cited in a PTI report, gold contracts for June delivery traded lower by Rs 1,085 or 0.97% at Rs 91,180 (per 10 grams) in a business turnover of 11,756 lots on the Multi-Commodity Exchange.

Gold Price Outlook

Analysts are expecting the downturn to continue ahead as the commodity has already breached key support levels on technical charts.

"Gold prices are likely to see an extended corrective move as key chart supports are breached at $3,190 in the international spot and Rs 92,000 on MCX. Price decline remains supported by easing geopolitical risk premium in the global market," said Pranav Mer, vice president, EBG - commodity and currency research, JM Financial Services.

Even in international markets, the yellow commodity is witnessing a sharp drop in price levels. Gold price has declined from its all-time high of $3,500 last month to below $3,140.

Key Levels

"On the charts, prices are likely to see resistance at $3195/ $3210, and downside support at $3120/$3070. On MCX, resistance is seen at Rs 92,350/ 92,600, and downside support at Rs 90,500/ Rs 89,700," said Pranav Mer.

In the upcoming session, market focus will shift to the Russia-Ukraine peace talks, US retail sales data, producer inflation figures, jobless claims, and the speech by the Federal Reserve Chairman Jerome Powell.