Gold Prices Drop by Rs 2,224 as Indo-Pak Tensions Ease, Silver Also Declines

Gold June futures had ended the session at Rs 96,518, gaining 0.36 per cent, while silver July futures rose 0.22 per cent to Rs 96,729.

Gold June futures on the Multi Commodity Exchange (MCX) fell sharply by Rs 2,224 or 2.3 per cent, trading at Rs 94,294 per 10 grams, as geopolitical tensions between India and Pakistan appeared to subside, calming safe-haven demand. Meanwhile, silver July futures opened at Rs 96,108 per kg, marking a decline of Rs 621 or 0.64 per cent.

The correction in domestic prices was also influenced by improved sentiment in global markets, particularly regarding progress in the long-standing US-China trade dispute. The combination of easing military conflict and softening trade anxieties trimmed investor interest in precious metals, which had rallied strongly in the previous week.

On Friday, both metals had closed in the green domestically and internationally. Gold June futures had ended the session at Rs 96,518, gaining 0.36 per cent, while silver July futures rose 0.22 per cent to Rs 96,729.

Last week’s price volatility was largely attributed to Operation Sindoor, a high-profile military operation by the Indian Army, which had heightened fears of escalation with Pakistan. Additionally, the Bank of England’s interest rate cut by 25 basis points bolstered global demand for precious metals as investors sought safer returns.

Despite the temporary pullback, Jain remains cautiously optimistic about the broader trend in precious metals. He expects further volatility this week due to dollar index fluctuations and continued geopolitical uncertainty. The US Dollar Index (DXY) stood firm at 100.57, reflecting a gain of 0.23 per cent, and the Federal Reserve‘s decision to keep interest rates unchanged has added a layer of complexity to market direction.

Forecast & Investment Strategy:

Jain forecasts the following price zones on MCX:

Gold: Support at Rs 96,100–Rs 95,550; Resistance at Rs 97,000–Rs 97,450

Silver: Support at Rs 96,000–Rs 95,350; Resistance at Rs 97,400–Rs 98,200

He recommends buying silver on dips near Rs 95,850 with a stop loss at Rs 95,100 and a target of Rs 97,400.

Internationally, Jain sees gold maintaining support around $3,180 per troy ounce, while silver is expected to hold above $31.40 per troy ounce.

The evolving dynamics of Indo-Pak relations, coupled with central bank policies and global trade signals, will likely determine the short-term direction for bullion traders this week.

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