Gold price outlook: How will China tariffs impact MCX gold rates? EXPLAINED

Gold price outlook: Gold Futures on the Multi Commodity Exchange (MCX) of India tanked more than ₹2,800 or more than 2 per cent on Friday, April 4, after China announced its 34 per cent retaliation tariff move against the United States.

Gold futures for the June 2025 contract closed at ₹88,130 after Friday's commodity market session, where the precious yellow metal was subject to heavy profit booking amid the escalating global trade war woes.

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After China's additional tariff announcement, Gold dropped 2.17 per cent to ₹88,099 per 10 grams on Friday at 7:34 p.m. (IST), compared to ₹90,057 at the previous commodity market close.

Global spot gold prices were also subject to 2.4 per cent losses to $3,041.11 per ounce on Friday as investors sold off the precious yellow metal amid a stock market crash.

According to commodity market experts, gold prices will likely witness further downside pressure as geopolitical tensions remain relatively subdued. This easing of global uncertainty is expected to reduce the demand for safe-haven assets like gold.

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Gold prices under profit booking?

Jateen Trivedi, VP Research of Commodity and Currency at LKP Securities, highlighted that the gold prices were subject to profit booking after the additional China tariff announcements on Friday, as the markets positioned themselves in the last few months for the ongoing trade war.

“Gold prices witnessed profit bookings following the official announcement of tariff pricing. The move comes as the markets had already priced in the impact of reciprocal trade tariffs over the past few months, making profit-taking a natural outcome,” said Trivedi.

“With the tariff premium now primarily discounted, further downside pressure may emerge as geopolitical tensions remain relatively subdued, especially from Russia-Ukraine and the Middle East. This easing of global uncertainty could lead to a softening in safe-haven demand,” he said.

“On the technical front, Comex gold price faces strong resistance at the $3,120 to $3,130 zone, while immediate support is around $3,050 to $3,055. A break below this could accelerate selling pressure in the near term,” said the commodities expert.

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Domestic gold prices to fall?

Sugandha Sachdeva, the founder of SS WealthStreet, stated that the rally in gold prices is currently facing global headwinds due to the ongoing trade war between the United States and other nations, including China.

“Gold's recent rally has encountered headwinds, with selling pressure emerging despite ongoing global trade disruptions. President Trump's decision to exclude gold and silver from tariffs has lessened supply-side anxieties, which reflected in rising Comex inventories in recent months amid concerns of higher import tariffs,” said Sachdeva.

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“Simultaneously, retail demand has softened following a substantial 19% price rally in the previous quarter. Gold's inability to sustain prices above the $3,120 per ounce resistance level in international markets and ₹88,800 kg per 10 gm mark in the domestic markets suggests a potential pullback, with domestic prices potentially falling to ₹87,000 crucial support initially or even ₹84,000 kg per 10 gm mark in coming days,” expects the commodities expert.

“A broader market sell-off has prompted some investors to reduce their gold exposure. Moreover, a strong US non-farm payrolls report for March has tempered expectations for aggressive Federal Reserve rate cuts this year. Concerns that rising tariff-driven inflation may further discourage the Fed from easing, is adding to further downward pressure on gold,” she said.

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.