Gold Price Today: It's a new day, a new high for the yellow metal. The gold rally is showing no signs of calming down. The rate of 24-carat gold (per 10 grams) stood at Rs 93,540 in the Delhi NCR region on Friday. The constant rise in price levels has come after Trump announced 'discounted' reciprocal tariffs on nations. While stock markets around the world, especially Asian equities, witnessed a major downtrend, the safe-haven asset continued its rally.
However, some analysts believe the euphoria has peaked, with an incoming correction of 38% insight.
According to a Morningstar analyst, gold prices in India could decline to Rs 55,000 per 10 grams. John Mills has reportedly forecasted a sharp drop in global gold prices to $1,820 per ounce, down from the current $3,080 per ounce. He expects a cooling off in the key factors that had earlier driven the rally. With exact levels of tariff now in the picture, the overall uncertainty might ease a bit, giving analysts a clearer picture of the broader impact.
Here's what can push the price of gold down-
1.Drop in demand by central banks
Trump's tariff fears took the better of both common investors and institutional investors. Central banks around the world, especially the People's Bank of China, started accumulating gold in reserves at an increased pace. However, this demand might witness a slowdown now.
2.Increase in Supply
The yellow commodity is likely to experience an increased supply this year as the annual mine production grew fractionally year-over-year to a new record high. As per a report by the World Gold Council, the full-year supply of recycled gold witnessed a noticeable surge of 11%. Meanwhile, a recent report by the Resources and Energy Quarterly has projected a rise in Australia's gold output, placing the country third behind China and Russia in the global rankings in the coming years.
3.Market Saturation
Usually, when there’s a sudden rise in mergers and acquisitions (M&A) in the gold industry, gold prices are at their peak. In 2024, these kinds of deals increased by 32%, which is a sign that the market might be overheating or getting too expensive. At the same time, there's been a big increase in investments in gold-backed ETFs, a pattern synonyms with an incoming correction in the commodity.
However, major financial institutions like Goldman Sachs, BofA and UBS have increased their price targets for gold, indicating a sharp contrast in the projections of the commodity.
