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Gold, silver prices see a major decline on Friday amid profit-booking and following reports that precious metals were excluded from former President Trump’s “reciprocal” tariffs.
On the MCX, gold prices on Friday declined by 0.9 per cent below the Rs 90,000-mark to the day’s low of Rs 89,260 per 10 grams during the day, before recovering to Rs 89,885 for the June 2025 contracts.
Gold and silver saw a sharp decline on Friday. Gold, which is considered a safe-haven asset during political and economic uncertainties, declined nearly 1 per cent despite US recession fears and a massive sell-off in equities across the world, including India, following Donald Trump’s ‘reciprocal tariffs’ announcement. Meanwhile, silver, which has industrial use as well, witnessed a bigger decline, falling by as much as 8 per cent after the tariff announcement in the global markets.
On the MCX, gold prices on Friday declined by 0.9 per cent below the Rs 90,000-mark to the day’s low of Rs 89,260 per 10 grams during the day, before recovering to Rs 89,885 for the June 2025 contracts. Silver saw a bigger decline with the prices falling 2.67 per cent at the day’s low on MCX. However, it recovered a bit to Rs 92,551 as of 4:15 pm on Friday.
In the international market, New York-based COMEX June gold closed 1.4% lower on Thursday, reaching a one-week low of $3,073.5 per ounce. Silver, however, fell as much as eight per cent.
The stock markets across the globe also declined massively with the US equities seeing biggest daily fall in five years in percentage terms. In India, the BSE Sensex tumbled 930.67 points to close at 75,364.69, while the NSE Nifty declined 345.65 points to 22,904.45 as the Trump Tariffs stoked recession fears in the US.
Why Did Gold, Silver Prices Fall Despite US Recession Fears?
According to analysts, gold prices saw a major decline on Friday following reports that precious metals were excluded from former President Trump’s “reciprocal” tariffs. They also said the move comes as the markets had already priced in the impact of reciprocal trade tariffs over the past few months, making profit-taking a natural outcome.
Kaynat Chainwala, assistant vice-president (commodity research) of Kotak Securities, said, “COMEX June gold closed 1.4% lower yesterday, reaching a one-week low of $3,073.5 per ounce, following reports that precious metals were excluded from former President Trump’s “reciprocal” tariffs. Gold inventories on COMEX have surged in recent months amid concerns that tariffs could disrupt shipments.”
However, fears of retaliation from key trading partners and the potential for a full-blown trade war boosted safe-haven demand, limiting losses, he added.
Jateen Trivedi, vice-president (research analyst- commodity and currency) of LKP Securities, said, “Gold witnessed profit booking with prices down by Rs 650 at Rs 89,450 on the MCX, following the official announcement of tariff pricing. The move comes as the markets had already priced in the impact of reciprocal trade tariffs over the past few months, making profit-taking a natural outcome.”
Will Gold Decline 38%?
John Mills, a market strategist at US-based financial services firm Morningstar, projected that gold could fall to $1,820 per ounce, a stark contrast to its current price of approximately $3,080 per ounce. This would equate to a nearly 38% reduction, a scenario that could dramatically alter the gold market.
However, LKP’s Trivedi said there is the downside level depends upon the geopolitical situation.
“With the tariff premium now largely discounted, further downside pressure may emerge as geopolitical tensions — especially from Russia-Ukraine and the Middle East — remain relatively subdued. This easing of global uncertainty could lead to a softening in safe-haven demand,” said Trivedi.
Kotak Securities’ Chainwala said there is a strong support in gold prices due to rate cut expectations, central bank purchases, and strong ETF demand.
“Additionally, gold remains supported by expectations of rate cuts, central bank purchases, and strong demand from gold-backed ETFs. Currently, gold is trading above $3,120 and may stay supported as markets remain on edge ahead of key US jobs report and speeches by Fed Chair Powell and other FOMC officials,” Chainwala said.
Technical View
On the technical front, Comex gold faces strong resistance at the $3,120–$3,130 zone, while immediate support is seen around $3,050–$3,055. A break below this could accelerate selling pressure in the near term, Trivedi said.