Gold price prediction today: Amidst ongoing US-China trade deal talks, gold prices are likely to continue fluctuating, with geo-political uncertainties adding to volatility. Where are gold prices headed in the short-term and what are the factors that investors need to watch out for? Praveen Singh, Senior Fundamental Research Analyst- Currencies and Commodities at Mirae Asset Sharekhan shares his views:Gold Performance:Top trade deputies of the US and China began their talks in London on Monday. Gold gained on Monday on a weaker US Dollar. MCX August gold contract was at Rs 97200, up 0.16% on the day.Earlier, spot gold prices fell 1.25% to close at $3310 on Friday as the US non-farm payroll report (May) came in somewhat better than expected, though details were not so encouraging.Easing US-China trade tensions pressurized the yellow metal further. Despite falling for two straight days on June 5 and June 6, the metal closed nearly 0.63% higher on a weekly basis in the week ending June 6.The metal rose to $3403 on June 5 –highest since May 8- as traders piled into the metal on safe haven demand as US-China tensions escalated.US-China trade talks begin in London:US Treasury Secretary Bessent, Commerce Secretary Lutnick and US Trade Representative Greer met a Chinese delegation led by Vice Premier He Lifeng Monday at London’s Lancaster House. Presence of high-profile officials in Trump’s Team reflects willingness of the US administration to allow some relaxations in the US exports to China, which may include technical supplies, jet engine parts, etc. China, in turn, is expected to ease rare earth exports to the US.Gold ETF holdings:Total known global gold ETF holdings stood at 88.394MOz as of June 6. ETF holdings witnessed net inflows for the second consecutive week following net outflows for five straight weeks. ETF holdings are up around 6.70% YTD.Gold Data roundup:China’s inflation data released Monday showed that China’s CPI (May) declined 0.1% y-o-y vs the forecast of -0.2%. It was the fourth straight monthly decline as the Chinese economy continues to struggle with sluggish demand amid a raging trade war. China’s factory deflation continued for the 32nd straight month as PPI (May) declined 3.3% y-o-y as against the estimate of 3.2% and 2.7% decline in April. The deflation threat will continue to linger unless consumer demand remains sluggish.China’s exports slowed from 8.1% y-o-y in April to 4.8% y-o-y (forecast 6%) in May as shipments to the US declined 34% y-o-y, worse than a 21% decline registered in April. Chinese imports dipped 3.4% y-o-y due to trade uncertainty as against the forecast of a decline of 0.8%.The US non-farm report (May) released Friday was somewhat better-than-expected as US employers added 139K jobs Vs the forecast of 126K jobs, while the unemployment rate held steady at 4.2%. Average hourly earnings m-o-m and y-o-y rose 0.4% and 3.9% respectively Vs the respective estimates of 0.3% (prior 0.2%) and 3.7% (prior 3.9%). However, two-month payroll net revision showed a decline of 95K jobs as labor force participation rate slid from 62.6% to 52.4%. The household survey reflected a weakening job market. Even as the population increased by 188k, the labor force dropped by 625k. Thus, even though employment fell by 696k, the unemployment rate held steady at 4.20%.Upcoming data:Traders will closely monitor US CPI (May) and PPI (May) data to be released on June 11 and June 12 respectively for clues to the Fed rate cut path.US Dollar and yields:The US Dollar Index, at the time of writing, was seen at 98.95, down nearly 0.24% on the day. The Index fell 0.14% in the week ending June 6. Ten-year and 30-year US yields were a tad lower at 4.48% and 4.95% respectively.Weekly CFTC data:Money managers increased their net bullish gold bets to a seven-week high in the week ending June 3.China buys gold for the seventh straight month:China’s gold reserves were up for the seventh consecutive month as PBoC bought around 2 tons of gold in May. China’s gold holdings reached 73.80 MOz at the end of May.Gold Price Outlook:The lingering deflation threat to China’s economy, positive ETF inflows and not so strong US non-farm payroll report (May) are positive factors for the yellow metal. However, in the near-term, the metal is expected to take its clues from the ongoing US-China trade talks in London. Positive outcomes from the talks will weigh on the shiny metal. In that case, gold may fall to as low as $3260 (Rs 95,000). Interim support is at $3292 (Rs 96,000). Resistance is at $3365 (Rs 98,000)/$3405 (Rs 99,200).In all the possibility, there may be some tentative positive developments in the trade deal talks. In that case, gold may decline to test the support at $3292. However, full resolution of all the trade related issues looks to be elusive for the time being. Nonetheless, traders need to take cognizance of the ongoing US-China trade deal talks. In the meantime, a light sell position can be initiated with due risk management in place.(Disclaimer: Recommendations and views on the stock market and other asset classes given by experts are their own. These opinions do not represent the views of The Times of India)
