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Gold sees significant decline on global trade tensions, recession fears

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Spot gold experienced a significant decline on Monday, April 7, 2025, dropping 0.3% to $3,027.90 per ounce after hitting a 3.5-week low earlier in the session. This unusual behavior for gold, traditionally a safe-haven asset, prompted market speculation that investors are selling bullion to realize profits or cover margin calls on other investments. The sell-off is attributed to escalating global trade tensions and the resulting fears of a potential global recession.

Adding to the bearish sentiment, Morningstar’s John Mills foresees gold prices plummeting to $1,820 per ounce—a 38% decline—driven by easing inflation and potential trade normalization. Mehta Equities’ Rahul Kalantri attributes recent volatility to factors like a weak US jobs report and dovish Fed signals, projecting key trading ranges for gold.  

Gold prices face a potential 38% decline, according to Morningstar’s John Mills, who forecasts a drop to $1,820 per ounce due to shifting market dynamics. Meanwhile, Mehta Equities’ Rahul Kalantri warns of persistent extreme volatility, outlining specific support and resistance levels in both USD and INR, and attributing the recent swings to various economic indicators.  

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International News

Precious Metals Under Pressure: Diplomatic Shifts, Geopolitical Risk, and Central Bank Outlook AUGMONT BULLION REPORT

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  • Safe-Haven Dynamics – Gold is trading below $4650 as investors evaluate ongoing diplomatic efforts to resolve the US–Iran conflict. The crisis has caused a significant energy supply disruption and heightened inflation concerns. Iran has proposed halting its operations in the Strait of Hormuz in exchange for a complete ceasefire and removal of the US blockade on Iranian ports.
  • Geopolitical Developments – Tehran has submitted a new proposal to Washington via Pakistani intermediaries, offering to reopen the Strait of Hormuz conditional on the US lifting its blockade, while postponing discussions on its nuclear program. Washington remains skeptical and is likely to respond with counter-proposals in the near term. Iran’s nuclear ambitions remain the central point of disagreement between the two sides.
  • Macro-economic Signals – Markets are also focused on upcoming monetary policy decisions by the Fed, ECB, and BOJ this week. Persistent energy price inflation, driven by Middle East tensions, has strengthened expectations that central banks may maintain or further raise interest rates. This monetary tightening outlook is exerting downward pressure on gold prices. 

Technical Triggers

  • Gold has broken the important support of $4650 (~ Rs 151,000), the next target is $4550 (~ Rs 147,500).
  • Silver is on the verge of breaking $73 (~ Rs 235,000). If prices sustain below this level, the next target is $70 (~ Rs 225,000).

Support and Resistance

International Gold Support Level
International Gold Resistance Level 
Domestic Gold Support Level
Domestic Gold Resistance Level
: $4550/oz
: $4850/oz 
: Rs 147,500/10 gm
: Rs 155,000/10 gm
International Silver Support Level
International Silver Resistance Level 
Domestic Silver Support Level
Domestic Silver Resistance Level
: $70/oz
: $77/oz 
: Rs 225,000/kg
: Rs 245,000/kg 

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