Gold price fall: Yellow metal slips for third straight day, where is it headed?

Gold price today: Gold prices fell for the third straight session on Wednesday US President Donald Trump extended his tariff timeline easing safe-haven demand. 

At 4:44 pm, gold price slipped to Rs 96,069 per 10 gm, down Rs 403 from the previous close of Rs 96,472 on MCX. During the recent rally, price of the yellow metal hit a record high of Rs 1,01,078 on June 16.  Meanwhile, the dollar index rose 0.13% to 97.64, sending the yellow metal lower in trade today. 

Since, the price of gold is traded in dollars, a rise in the dollar usually leads to gold getting costlier for buyers with other currencies potentially leading to a fall in demand and price of the precious metal.  Additionally, gold is often considered as a hedge against inflation, with investors buying the yellow metal when the greenback falters. A reduction in demand keeps the price of gold lower and vice versa. 

Jateen Trivedi, VP Research Analyst - Commodity and Currency, LKP Securities said, "Gold prices traded weak by another Rs 670 to hover below the Rs 96,000 per 10 gram mark as Comex gold slipped below $3,300, pressuring global sentiment. While MCX gold received limited support from a weaker rupee, the broader trend remains bearish as the U.S. extended its tariff timeline, giving room for trade deal negotiations and easing safe-haven demand. Gold is expected to remain volatile with a trading range seen between Rs 95,000 and Rs 96,500."

Meanwhile, BMI, a Fitch Solutions firm sees no quick collapse in gold price yet after the recent record run. 

"While gold remains on a pedestal due to trade uncertainties, heightened geopolitical tensions (especially in the Middle East), a weaker US dollar, and increasing central bank purchases, we note 
that the rally seems to have run its course with downside pressures building," said BMI. 

The firm expects annual average gold price for 2025 at USD 3,100/oz, and is neutral towards the asset class for the coming months.

In the longer term beyond 2025, BMI expects gold prices to ease. The main driver of easing gold prices in the longer term will be greater risk-on sentiment as the global economy recovers in the later part of the decade. 

"Despite our outlook for gold prices to weaken, we do not see a return to pre-Covid levels. Gold prices will average $2,720/oz during 2025-2029, compared with $1,393/oz in 2019," said BMI.