Gold Price Crash: Shocking ₹4,500 Drop in 3 Days – Smart Buy or Risky Trap?

Gold prices on India’s MCX plummeted nearly ₹4,500 per 10 grams in three sessions, retreating from a record high of ₹99,358 (April 22) to ₹94,902 (April 25). The drop reflects easing U.S.-China trade tensions, dollar strength, and profit-booking after a 26% rally since January. Analysts remain divided: while bullish factors like geopolitical risks and central bank demand underpin long-term optimism, short-term volatility looms as prices test key support levels (₹94,400–₹95,250).

Traders advise caution—breaching ₹94,000 could trigger deeper declines, but strategic buying on dips may suit risk-tolerant investors. Silver, too, shows tactical opportunities near ₹96,200–₹96,850. Ultimately, decisions hinge on global trade developments, dollar trends, and individual risk appetite, with experts urging consultation with certified advisors before acting. 

Gold Price Crash: Shocking ₹4,500 Drop in 3 Days – Smart Buy or Risky Trap?

India’s gold market has witnessed a dramatic shift this week, with prices crashing nearly ₹4,500 per 10 grams on the Multi Commodity Exchange (MCX) since hitting a record high of ₹99,358 on April 22. As the June contract hovers around ₹95,000 (as of April 25), investors are weighing whether this correction offers a strategic entry point or signals deeper volatility ahead. Let’s unpack the factors driving the drop and what experts advise.  

Why the Sudden Gold Price Crash? 

Easing Trade War Fears 

• Hopes of a U.S.-China trade truce have dampened gold’s appeal as a safe-haven asset. Reports suggest China may exempt some U.S. imports from steep tariffs, easing global economic uncertainty. This shift has triggered profit-taking by investors who rushed to gold during earlier tensions.  

Dollar Strength 

• The U.S. dollar index rose 0.3%, making dollar-priced gold costlier for international buyers. A stronger dollar often pressures gold demand, compounding the price decline.  

Domestic Profit Booking 

• After a 26% surge in domestic gold prices since January 2025 (from ₹76,000 to over ₹95,000), traders are cashing in gains, amplifying the downward momentum. 

Analysts’ Split Views: Opportunity or Risk? 

The Bull Case  

• Medium-Term Optimism: Geopolitical risks, central bank buying, and inflows into gold ETFs (notably in China) continue to support long-term demand.  

• Technical Support Levels: MCX gold finds immediate support at ₹94,400–₹95,250. A rebound from these levels could signal a buying window. 

The Bear Case  

• Volatility Ahead: Short-term price swings are likely as markets react to trade war headlines. A break below ₹94,000 could intensify selling.  

• Overheating Signals: Rahul Kalantri of Mehta Equities notes “multiple RSI divergences” on charts, hinting at potential overvaluation. 

Key Levels to Watch 

• MCX Gold: Support at ₹94,400–₹95,250; resistance at ₹96,600–₹97,280.  

• International Gold (COMEX): Support at $3,288–$3,315/oz; resistance at $3,375–$3,398/oz. 

For silver, analysts suggest buying dips near ₹96,200–₹96,850, targeting ₹98,200–₹99,100.  

Should You Buy Now? Considerations 

• Risk Tolerance: Gold remains volatile. Short-term traders might capitalize on swings, while long-term investors could view dips as portfolio diversification opportunities.  

• Global Cues: Monitor U.S.-China trade talks, dollar movements, and central bank policies. A renewed escalation in tariffs may revive gold’s rally.  

• Historical Context: Corrections of 5–10% are common in bull markets. The current 4.5% drop (from ₹99,358 to ₹94,902) aligns with typical pullbacks. 

Expert Recommendations 

• Prithvifinmart Commodity Research: Advises booking profits in existing gold positions and considering silver near ₹97,000.  

• LKP Securities: Suggests trading within ₹94,000–₹97,000 range until clearer trends emerge.  

• Way2Wealth Brokers: Neutral stance, citing high-volume sell-offs as a cautionary signal. 

The Bottom Line 

While the recent correction may tempt buyers, gold’s trajectory hinges on unpredictable geopolitical developments. Investors should align decisions with their financial goals, risk appetite, and market timing. As always, consult a certified advisor to navigate this volatile landscape