Gold Prices Drop Below ₹92,000: Analysts Predict Further Decline Amid Strong Dollar and Eased Trade Tensions: Gold prices are under pressure, slipping from their recent highs as global market sentiment turns risk-on following eased trade tensions between the United States and China. The June gold futures on MCX, which had previously surged to an all-time high of ₹99,358 per 10 grams, have now declined by ₹7,347 or 7.4%.
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On May 16, gold prices dropped sharply, falling over 1% intraday to trade below the ₹92,000 mark. In the international markets, spot gold was down 0.9%, trading at $3,210.19 per ounce. The metal is on track for its worst weekly performance since November 2024, having already lost more than 3% this week.
Key Factors Behind the Fall:
According to Tejas Shigrekar, Senior Technical Analyst at Angel One, gold’s traditional role as a safe-haven asset has weakened due to the easing of US-China trade tensions. The temporary reduction of tariffs for a 90-day period between the two economic giants has calmed fears around prolonged trade war impacts.
Additionally, a strengthening US dollar is weighing heavily on gold prices. The US dollar index is set to post its fourth consecutive weekly gain, making gold less appealing for buyers using other currencies.
Jateen Trivedi, VP Research Analyst at LKP Securities, noted that the lack of dovish commentary from the US Federal Reserve—particularly the absence of any imminent rate cut—has further reduced bullion’s short-term appeal.
Technical Outlook: Gold Nearing Breakdown Levels
Technical analysts are also signaling caution. Axis Securities reports that gold is close to breaching its 50-day moving average for the first time since December. The metal is currently testing the lower end of the moving average envelope (±3%), which has historically acted as strong support since November 2024.
The brokerage highlights that the period from May 16 to May 20 could be crucial for a potential trend reversal. A significant technical level is $3,136—where the current correction equals the previous one from the all-time high. A fall below this point could push gold further down to $2,875–$2,950.
Trivedi adds that the weakness in gold is likely to persist unless it regains footing above ₹94,000 on MCX and $3,240 on Comex. With global risk sentiment improving and the dollar remaining firm, bearish pressure may continue in the short term.
Trading Strategy:
Tejas Shigrekar recommends a “sell on rise” strategy. He advises selling near the ₹94,300–₹94,500 levels with a target of ₹90,000–₹89,500, placing a stop-loss above ₹95,600. If gold breaks below ₹89,500, the next support lies at ₹85,000, he added.
In dollar terms, spot gold may find support near $2,940 and face resistance at $3,320.