Gold Prices: Short-term Correction Amid Eased Trade Tensions

ICICI Bank Global Markets predicts a short-term correction in gold prices, fluctuating between USD 3050/oz and USD 3250/oz in Q2 2025. Following a 25% rally, a 4% drop has ensued due to reduced trade war anxiety. Despite eased demand, local prices in India show an upside bias for 2025.

According to a report by ICICI Bank Global Markets, gold prices are expected to undergo a short-term correction, trading within a range of USD 3050 to 3250 per ounce during the second quarter of 2025. This forecast follows a remarkable 25% surge observed from January to April 2025, which has recently reversed by 4%.

The decline in gold prices is attributed to reduced anxiety surrounding the trade war, consequently diminishing its safe-haven appeal. Despite lagging data from the World Gold Council, initial 2025 demand has been robust, driven by a 170% rise in investment-related purchases due to uncertainties related to Trump policies and trade war fears.

Trade-war concerns have lessened following a truce between the US and China, prompting a reduction in demand and lowering prices. The report notes the decrease in central bank purchases and forecasts that elevated prices might continue to impede jewelry demand. Locally, the Indian market saw gold prices trade flat, with an uptick expected as global prices stabilize.

(With inputs from agencies.)