Gold prices have seen a sharp drop in recent days, with MCX Gold August 5 contracts opening at Rs 97,852 per 10 grams on Monday. The decline is attributed to easing US-EU tariff tensions, strong US job data, and reduced expectations of Fed rate cuts. Spot gold also dipped in global markets, reflecting lower safe-haven demand.
Representational Image. File Pic
Over the last few days, the gold prices have been dropping significantly. With a variety of factors involved in driving down the gold prices, the US-EU trade might be the core reason for it. Considering the fact that the trade deal is playing a vital role in the gold price fluctuation, the global geopolitical tensions might just be another reason.
Gold prices since last year have been skyrocketing and have been fluctuating over the one lakh rupee mark. However, MCX Gold August 5 contracts traded with a nominal gain of 0.07 per cent at Rs 97,890 per 10 grams.
The MCX gold prices on Monday opened at 97,852.00, which was a significant drop in price considering the bullish trend that gold has been indicating for the past few days.
US President Donald Trump and European Commission President Ursula von der Leyen reached an agreement on a broad trade deal that includes 15 per cent tariffs on most European imports. This trade deal averts the US president’s earlier warning of a 30 per cent rate if a deal is not reached by August 1.
According to the All India Sarafa Association, the precious metal of 99.9 per cent purity had finished at Rs 99,620 per 10 grams on 24 July 2025.
At the local markets, gold of 99.5 per cent purity also decreased by Rs 500 to Rs 98,750 per 10 grams (inclusive of all taxes) on Friday last week, and a significant decrease in gold prices was also seen on Monday.
Saumil Gandhi, Senior Analyst - Commodities at HDFC Securities, on Friday stated that "Gold edged lower on Friday, impacted by easing tariff-related concerns, a rebound in the US dollar, and waning expectations for multiple interest rate cuts by the US Federal Reserve due to a strong job market," as cited by news agency PTI.
Earlier on Friday, spot gold fell by USD 20.72, or 0.62 per cent, to USD 3,347.94 per ounce in the international markets.
While commenting on the bearish gold price trend since the last couple of days, Aateen Trivedi, who is the VP Research Analyst - Commodity and Currency at LKP Securities, said that "Gold traded weak at USD 3,345 per ounce, as expectations of tariff deals between the US and trade partners like Japan and the EU reduced safe-haven appeal. These developments may keep gold volatile, especially at elevated levels.
Focus now shifts to the upcoming Fed's interest rate decision next week, which will be crucial for the direction of bullion prices," as cited by news agency PTI.
(With inputs from PTI)
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