On Monday, May 12, 2025 on the Multi Commodity Exchange (MCX), there was a huge decline in gold prices. The price of gold futures for June futures fell 3,930 i.e. 4 percent to 92,588 per 10 grams. Gold reached a low of 92,389 during the trading. Earlier, its closed price on Friday was Rs 96,518 per 10 grams.

Why such a big decline came in gold

The major reason behind this decline is to reduce global stress. There has been an agreement to provide relief in commercial tariffs between the US and China and the tendency to take risks among investors after the announcement of ceasefire between India and Pakistan has increased. This has reduced the demand for safe investment options like gold.

Dollar strength and global peace

In fact, the dollar index went above $ 101.50 with the declaration of temporary relief by the US-China in mutual tariff. At the same time, reports of the tension between Russia-Ukraine and India and Pakistan were reduced to profit booking.

Silver prices also fall

Along with gold, silver prices also recorded a steep decline. Silver futures on MCX fell by Rs 2,190, or 2.26 per cent, to Rs 94,539 per kg, while the previous closed price was Rs 96,729.

What will happen next?

Experts believe that now gold prices may face resistance within the range of Rs 94,000 to 95,000. If the global risk century remains stable, then gold can also fall up to Rs 90,000. In such a situation, investors are being advised to be cautious about investment in gold and keep an eye on market activities.

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The price of gold increased on April 22 when it crossed 10 grams per 10 grams. However, the market experts were already expecting that by the end of April i.e. till the arrival of Akshaya Tritiya, the gold could cross 1 lakh. But, since then, there is a decrease in gold prices continuously in a few days. According to the Indian Bullion Association, gold has fallen 0.8 percent to 10 grams per 10 grams on Tuesday.

Even globally, the price of gold has fallen by about 1 percent. Spot gold rate has fallen by 0.8 percent to $ 3,314.99 an ounce. While US gold futures have fallen 0.7 percent to 3,325 per dollar.

Gold prices fell globally

According to market experts, the major reason for the fall in gold prices is the decrease in tension on world trade and the positive trend of investors in the global market. US Treasury Secretary Scott Besant recently said that many top trading partners including India have received many better proposals in exchange for American tariffs. He also said that there may be business agreements with India soon.

Apart from this, China’s decision to remove some tariffs over American goods is also considered a step towards reducing stress. The US government has also indicated that they will reduce auto tariffs, which may improve business relations.

Gold price coming down from the sky

VP Research Analyst Jitan Trivedi in LKP Securities said- The reason for the stress prevailing in business relations is due to the American, the American has opened the way to many countries for talks on tariffs. At the same time, the statement of US President Donald Trump of the early business agreement between China and American has also helped in reducing stress. In addition, a possible peace agreement between Russia and Ukraine has also reduced the spirit of safe investment in gold.

As soon as the feeling of fear in investors is over, they will come out of the thinking of investing money in safe investment. If there is a decrease in the demand for gold, its price will fall. Experts say that due to the fear of global recession and reastence in the international market, gold had reached $ 3,500.05 an ounce earlier.

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