Gold rate today: Prices decline on US-UK trade deal, stable dollar; what should investors do?

Gold rate today: Gold prices slipped in the domestic futures market Friday morning, tracking weak global cues and softer demand in the domestic spot market. MCX Gold June 5 contracts traded 0.24 per cent down at ₹95,940 per 10 grams around 9:10 AM.

International gold prices declined after US President Donald Trump announced a trade deal with the UK. As concerns over a trade war fade and expectations of trade agreements with major economies, such as China, India, and Japan, rise, gold's safe-haven appeal is weakening.

"Gold prices declined to approximately $3,300 per troy ounce, pressured by a firmer US dollar and easing investor demand for the non-yielding asset amid improving global trade sentiment," said Jigar Trivedi, Senior Research Analyst at Reliance Securities.

"The precious metal extended losses as markets reacted to the newly announced US-UK trade agreement. President Trump described the deal as a 'breakthrough' expected to bolster American exports, though a 10 per cent tariff on certain goods remains intact. He hinted at the potential easing of tariffs on China," Trivedi observed.

Meanwhile, China remains optimistic about securing a favourable trade deal with the US.

"China has full confidence in its ability to manage US trade issues, Vice Foreign Minister Hua Chunying said on Friday, a day before officials from both sides are set to meet in Switzerland to discuss the tariffs they have imposed on each other," reported Reuters.

Meanwhile, a stable dollar has also weighed on gold prices of late. Reuters reported that the US dollar looked set for a weekly gain on most major peers on Friday as a US-UK trade deal raised hopes of progress in looming US-China talks.

Diminishing hopes of an early rate cut by the US Federal Reserve are also supporting the dollar and putting pressure on gold.

The US Federal Reserve on May 7 said it is in no hurry to cut rates amid increased risk of inflation.

Outlook for MCX Gold, Silver

According to Rahul Kalantri, VP of commodities at Mehta Equities, gold has support at $3,265-3,240 while resistance is at $3,310-3,340. Silver has support at $31.90-31.65 while resistance is at $32.50-32.70.

In INR terms, gold has support at ₹95,550-94,980 while resistance is at ₹96,650-97,040. Silver has support at ₹95,380-94,550 and resistance is at ₹97,250-97,950, said Kalantri.

"The outlook for MCX Gold June futures remains bearish, driven by the dollar index climbing to the 100 mark. Technically, MCX Gold June could decline further, potentially testing support at ₹95,800 per 10 grams," said Trivedi of Reliance Securities.

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Disclaimer: This story is for educational purposes only. The views and recommendations above are those of individual analysts or broking companies, not Mint. We advise investors to check with certified experts before making any investment decisions, as market conditions can change rapidly, and circumstances may vary.