Gold Prices Remain Weak After US-China Tariff Deal — Should You Buy, Sell or Hold?

The price of yellow metal declined in the domestic futures market following the positive outcomes from the US-China trade deal. MCX Gold June 5 contracts were trading at ₹92,955 per 10 grams, up 0.06% after tumbling 4% to ₹92,901 per 10 grams.

Gold prices crashed to a one-week low on Monday and traded near that level on Tuesday.

Washington and Beijing agreed to make peace after reducing tariffs on each other, thereby boosting market sentiment.

Both the nations announced to reduce tariffs for the next 90 days after two days of negotiations in Geneva, Switzerland. The US slashed tariffs on Chinese imports to 30% from 145%, while China brought down the tariffs on US imports from 125% to 10%.

Additionally, easing geopolitical tensions between India and Pakistan also had a significant impact on the gold prices.

“Gold and silver showed a heavy selloff at the start of the new week amid a trade deal between the US and China in Switzerland. The dollar index and the US bond yields jumped after the announcement of trade deals. The Indo-Pak ceasefire over the weekend also eases safe-haven buying for precious metals,” Manoj Kumar Jain of Prithvifinmart Commodity Research observed.

Investors are now keeping a close watch on the US Consumer Price Index report, which is expected to be released today. This will set the tone for the US Federal Reserve’s interest rate trajectory.

What should investors do?

According to Jain, gold and silver prices are expected to remain volatile this week amid uncertainty in dollar index and geopolitical scenarios.

He suggests buying silver on dips and avoiding gold for a few days.

“We suggest buying silver on dips and staying away from gold for some trading sessions,” said Jain.

He added that the yellow metal has support between $3,200 and $3,180, while resistance is seen at $3,250–3,274 per troy ounce. Silver is expected to have support at $32.30–32.00, with resistance at $32.94–33.30 per troy ounce in today’s session

He said that MCX Gold has a support between ₹92,400 and ₹91,770, while resistance is at ₹93,360-94,000. Silver has a support between ₹94,400 and ₹93,650 and resistance is placed between ₹96,000 and ₹96,650.