The recent fall in gold prices is likely to be temporary, according to a report by ICICI Bank Global Markets. The report said that gold prices may trade between USD 3,050 and USD 3,250 per ounce in the second quarter (Q2) of 2025.
Gold had risen sharply by 25 per cent between January and April 2025. But in the last two weeks, prices have dropped about 4%. This fall is mainly due to lower demand for gold as a safe asset. Investors are now less worried about the trade war between the US and China.
A recent 90-day truce between the US and China has reduced tensions. This has made investors turn away from gold for now. The report also said that data from the World Gold Council shows a sharp 170% rise in investment demand for gold in Q1 2025. This increase came when fears over US trade policy were high.
However, with those fears easing, demand has fallen and prices have dipped. Central banks are also buying less gold, but ICICI Bank believes this is just for the short term. On the other hand, high gold prices have hurt jewellery demand. This weak demand may continue going forward.
The report also says there could be a mild correction in global gold prices if the US signs more trade deals with other countries.
In India, gold prices have remained flat. This is due to weak global prices and a slightly stronger Indian rupee. On Saturday, gold on the MCX was priced at Rs 92,480 for 10 grams.
India’s gold imports also dropped. In March, the country imported gold worth USD 4.5 billion, but in April it was down to USD 3.1 billion. This shows reduced demand, especially for jewellery.
Looking ahead, gold in Indian markets is expected to trade between Rs 92,500 to Rs 94,500 per 10 grams in Q2 2025. In the second half of the year, prices may rise further to Rs 96,000–98,000 per 10 grams.
(With ANI Inputs)
