The pullback follows renewed trade war rhetoric from former U.S. President Donald Trump, which has shaken investor sentiment and spurred a flight toward the greenback and government bonds, dampening demand for bullion.

On the Multi Commodity Exchange (MCX), the August 5 gold futures contract slipped 0.30% to Rs.96,178 per 10 grams. Globally, spot gold was trading 0.4% lower at $3,286.96 per ounce as of 06:24 GMT, while U.S. gold futures dropped 0.7% to $3,295—both marking their weakest levels since June 30.

The latest downturn in gold came as the U.S. dollar climbed to a two-week high and 10-year Treasury yields approached a three-week peak, reducing gold’s appeal as a non-yielding asset. In India, the rupee’s appreciation further pressured local gold prices, compounding the impact of global factors.

Market jitters were further heightened by Trump’s latest tariff threats. He has proposed a 50% duty on copper imports and hinted at fresh levies on semiconductors, pharmaceuticals, and goods from BRICS nations. These developments triggered broader market uncertainty, though gold—typically a safe-haven asset—saw only a limited immediate benefit as investors sought dollar-denominated assets instead.

Despite the recent weakness, technical indicators suggest gold remains range-bound in the near term, with resistance pegged at Rs.97,500 and support at Rs.95,500. Analysts expect the price to trade between Rs.95,500 and Rs.98,500 over the coming days, influenced by upcoming U.S. macroeconomic data such as Non-Farm Payrolls and unemployment figures.

In the medium to long term, however, the outlook for gold remains positive. Central banks continue to accumulate gold at record levels, exceeding 1,000 tons annually—a key structural support for prices. Persistent inflation and lingering geopolitical risks are also seen as bullish drivers, even if short-term volatility continues.

Analysts believe gold could break higher from its current range depending on how U.S. economic indicators shape monetary policy expectations. Some expect medium-term prices to hover between $3,150 and $3,500 per ounce, with the potential to test $3,700 over the longer term.

While the near-term may be clouded by global policy shifts and market reactions, gold’s long-term fundamentals remain intact, offering investors potential opportunities on price dips—especially in an environment of sticky inflation and geopolitical uncertainty.