Augmont: Gold retraces to $3300 – Will the rally continue or correction coming?
The gold market cooled off to $3300 (~Rs 95000) after reaching $3500 (~Rs 99350) last week as Donald Trump signalled a potential softening of his aggressive trade stance toward China and indicated that tariff negotiations were underway.
Uncertainty Remains Despite Reduced Market Tensions
While market tensions have subsided, uncertainty remains high enough to sustain gold prices at their current levels. While President Donald Trump claims his government has begun trade discussions with China, he has stated that the US will be reasonable in terms of tariffs and that markets are reacting to tariff policies. He also stated that Iran’s situation is progressing nicely and proposed a possible interim agreement with Iran.
Other Geopolitical Issues at Play
Other geopolitical issues are currently at play. According to reports, high-level Trump administration official Steve Witkoff is scheduled to meet with Russian President Putin soon. There are also rumours that the United States and Israel will destroy Iran’s nuclear capacity if Iran does not reach an agreement with the US.
RBI’s Gold Purchases and Global Trends
The Reserve Bank of India purchased 57.5 tonnes of gold during the previous fiscal year, the second-highest acquisition in a year since the central bank began accumulating the precious metal in December 2017. As of March 2025, the RBI’s entire gold stock amounted to 879.6 tonnes, up from 822.1 tonnes the previous year. During 2023-24, the RBI added 27.47 tons of gold to its holdings, at a time when central banks throughout the world were expanding their gold purchases due to the US dollar’s prolonged weakening amid global uncertainty.
Technical Indicators and Potential Price Movements
The creation of a “Shooting Star” candlestick pattern in the weekly charts, indicates a probable uptrend reversal, which was an intriguing technical component of gold’s price movement last week. If prices sustain below $3300 (~Rs 95000) this week, they may fall 50% to $3240 (~Rs 93000) and 61.8% to $3175 (~Rs 91500).
Possibility of Price Rebound with New Instability
Having said that, if there is a new trigger of instability in trade talks in the market, we could see gold prices rebounding again. And if prices sustain above $3380 (~Rs 96400), we could see a run up towards $3435(~Rs 97400) and $3500(~Rs 99400).
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