Gold prices likely to correct further as risk-on sentiment takes hold: Experts

Prices of gold, the ultimate safe-haven asset, tumbled sharply in trade over the past few sessions, with prices sinking to five-month lows, as the global risk-on sentiment is restored following easing geopolitical tensions and tariff-related concerns. Going ahead, analysts expect that gold prices are likely to see a short-term correction after recording a sharp run-up over the past year.

On Thursday, May 15, prices of COMEX Gold sank to  $3,150/oz, following a two percent fall in the previous session. On the domestic front, MCX June gold contracts tumbled 1.5 percent to hit Rs 90,890 per ten grams, extending losses from the previous session. Prices of silver saw a deeper loss, with MCX July Silver contracts sinking to Rs 93,800 per kilogram, down 1.7 percent in trade.

Easing global trade tensions continued to reduced demand for safe-haven assets. The US and China agreed to significantly cut tariffs and initiated a 90-day pause to finalize a broader deal, while President Trump pointed to ongoing negotiations with India, Japan, and South Korea, noted Jigar Tridevi, Senior Analyst, Reliance Securities.

Geopolitical risks also eased, with India-Pakistan tensions stabilizing and rising optimism that Trump may lift sanctions on Syria during his Middle East visit, he added.