Gold prices on the Multi Commodity Exchange (MCX) fell over 1% on Monday after touching an all-time high above ₹1,02,000 per 10 grams, tracking weakness in international bullion markets. Silver prices also traded sharply lower.
MCX gold rate declined ₹1,295, or 1.27%, to an intraday low of ₹1,00,503 per 10 grams, while MCX silver futures dropped 1.59% to ₹1,13,047 per kg.
Last week, MCX gold price had surged to a record ₹1,02,250 per 10 grams, supported by a depreciating rupee and heightened global macroeconomic risks, which boosted its appeal as a safe-haven asset.
The latest pullback comes amid optimism over a potential resolution to the Russia–Ukraine conflict, following the announcement of a meeting between US President Donald Trump and Russian President Vladimir Putin on August 15 in Alaska to discuss ending the war.
“Elevated geopolitical tensions, looming US tariffs, and expectations of US Federal Reserve rate cuts have been driving gold demand. Safe-haven buying has remained resilient, even as domestic jewelry demand weakens,” said Jigar Trivedi, Senior Research Analyst, Reliance Securities.
However, analysts now believe several of the factors underpinning this year’s gold rally may have peaked, increasing the likelihood of a correction.
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Ajay Kedia, Director, Kedia Advisory, noted that the triggers for gold price rally are starting to fade.
“The announcement of the Trump–Putin meeting has eased geopolitical concerns over the Ukraine war. Expectations of a pause in US rate cuts next year, a stabilising dollar index, and slower central bank buying all point to potential weakness in gold prices ahead,” he said.
According to Kedia, gold is already in a technically overbought zone. “Gold prices have been facing resistance at the $3,500 level. On MCX, gold prices could correct to ₹96,500 – ₹97,600 in the short term, with support at ₹97,600 and resistance at ₹1,03,500,” he added.
Trivedi also warned that record-high prices could dampen short-term physical demand in jewelry and retail segments.
“Current levels present an opportunity to partially book profits. MCX gold price for October futures could drop to ₹96,000 – ₹92,000 per 10 grams over the next two to three months, while resistance is seen at ₹1,06,000,” he said.
With geopolitical risk premiums easing and key bullish drivers losing momentum, analysts suggest that investors consider partial profit booking in gold at current elevated levels, while keeping a close watch on global developments and technical indicators.
Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before making any investment decisions.
