Today, gold rates saw a big drop as the price of gold on MCX dropped below the crucial level of ₹99,000 per 10 gram. Gold, which was soaring from a record high yesterday, is now moving cautiously. Both investors and traders are wondering what is going to happen next after this sudden crash—is it just profit booking or a sign of some big economic crisis? Let us understand in detail in this article, with numbers, analysts' views, and outlook.
What happened and how much was the fall?
Sharp fall on MCX: Gold prices fell by ₹804 in the afternoon of 19 June, when the price of gold fell from ₹99,537 to ₹98,733.
2.31% correction from record high: Just three days ago, on June 16, gold had touched a historic high of ₹1,01,078 on MCX, but since then the prices have fallen by about 2.31%.
Pressure in international market too: Gold per ounce in the global arena fell from $3,368.74 to $3,351, a drop of $17.37.
This crash does not mean that the long-term value of gold is over—rather, short-term profit booking and external factors have put temporary pressure.
Main reasons for the decline
Profit Booking: Many traders booked their profits after the record high, which increased short-term supply and brought down prices.
US Fed's stance: The US Federal Reserve kept interest rates unchanged and gave conservative signals about future rate cuts, which put pressure on gold as higher rates reduce the demand for non-yielding assets.
Geopolitical tensions: The Iran-Israel war supported gold earlier, but the market has “priced in” the recent developments, so those tensions are no longer a bullish catalyst.
Global growth outlook: Citi has revised its forecasts and said that gold could fall below $3,000 by late 2025 or early 2026, and has also raised the 0–3 month target from $3,500 to $3,300 and the 6–12 month target from $3,000 to $2,800.
The combination of these factors is encouraging short-term selling, while in the long term if there is a growth slowdown or inflation spike, gold could strengthen again.
Analysts outlook
Manav Modi, Motilal Oswal: Gold is not seeing any momentum due to Fed's cautious policy stance, but if inflation picks up again or there is a geopolitical escalation, gold could rally back
Aksha Kamboj, IBA & Aspect Global Ventures: Gold is currently trading in a narrow downward trend; any major upward move will only come if there is a significant escalation in the Middle East
Rahul Kalantri, Mehta Equities: In INR terms, gold has support between ₹98,950–98,690 and resistance between ₹99,950–1,00,240. International support levels are $3,345–3,320 and resistance is $3,400–3,422
Jateen Trivedi, LKP Securities: The market is focusing on three macro triggers: US Fed decision, Iran-Israel tensions and global trade negotiations. The signals received from these will determine the direction of gold; the range may be ₹98,500–1,00,500 in the near term
It is clear from these expert views that market participants are currently cautious, but are also looking for dip-buying opportunities.
Technical Outlook & Upside Risks
Support Zone: ₹98,700–98,600 is considered as crucial support, if it breaks then gold can go up to ₹98,000
Resistance Levels: ₹99,900–1,00,350 can provide strong resistance, where profit booking can resume
Upside Catalyst:
Geopolitical Escalation: If the Iran-Israel conflict worsens, then sudden safe-haven demand can push gold up to ₹1,05,000
Rupee Weakness: A sharp fall in USD/INR will increase the import cost, due to which domestic gold prices can again show a rise.
Inflation Surprise: If CPI in India or US increases unexpectedly, gold will attract gold because investors will demand inflation hedge
In the short-term, the gold rate crash has made investors a bit nervous, but if If you think on a long-term horizon, this could be a golden opportunity for dip-buying. Technical support is strong, but the market will get signals from three macro triggers—Fed decision, geopolitical tensions, and global trade negotiations. So, adopt a “wait and watch” strategy and plan to buy on dips, but with proper stop-loss, as experts recommend.
0 Comments