Gold Prices Rebound to ₹92,629/10g After Two-Week Lull: Easing Trade Tensions and

China Holiday Fuel Momentum

ASJ Financial Desk | May 2, 2025

Gold prices are once again glittering on investors’ radars. After hovering near a two-week low last week, gold prices rebounded sharply to ₹92,629 per 10 grams on Thursday, backed by a confluence of global and regional tailwinds. This price correction follows a brief consolidation phase, and it signals a shift in short-term sentiment that could open the door to further gains if momentum sustains.

The key triggers? A temporary truce in global trade disputes, coupled with lower market activity in China due to the Golden Week holiday, has created a vacuum in bullion supply, amplifying short-term demand pressures in other markets—including India.

Let’s delve into the factors propelling gold’s upward move, investor sentiments, and the broader global dynamics influencing the precious metals space this week.

Gold Prices at a Glance

As per data sourced from leading bullion traders and confirmed by Zee Business and Reuters, here is the latest spot pricing snapshot:

The uptick marks a 2.1% increase from the two-week low of ₹90,770 recorded in late April. Traders note that the rebound has been swift and supported by favorable sentiment across global commodities.

Global Trade Calm: A Short-Term Catalyst

Gold is traditionally seen as a safe haven during times of geopolitical or economic uncertainty. However, the easing of trade tensions between the U.S. and key Asian partners this week has provided a dual effect: reducing risk-off trades while subtly boosting demand for gold as a balancing asset in mixed portfolios.

An interim agreement between the U.S. and Taiwan on semiconductor export protocols, as well as resumed EU-China commerce talks, has cooled market anxieties—causing a recalibration in investor strategy.

“The brief pause in trade escalation is not enough to erase structural risks, but it does prompt asset managers to rebalance. Gold benefits from that shuffle,” explained a commodities strategist at Reuters.

China Holiday: Reduced Activity, Global Ripple Effects

The Golden Week holiday in China (May 1–5) has historically led to a demand vacuum in the country’s domestic markets. However, this time, international traders are leveraging the lull to push demand elsewhere—most notably in India and Southeast Asia.

Chinese gold buyers, who form one of the world’s largest consumption bases, are absent from active trade during this holiday window. But festive buying in India and wedding season purchases are stepping in to fill the void.

“This holiday always leads to a temporary export slack in Asia, which allows prices to firm up in India where demand remains elastic,” said a bullion wholesaler in Mumbai’s Zaveri Bazaar.

🇮🇳 Indian Demand and Festive Buying Supporting Price Resilience

India’s wedding and festive season continues to support resilient domestic demand. Despite high prices, retail jewellers and wholesalers are reporting 18–22% higher orders YoY for Akshaya Tritiya and pre-wedding purchases.

The Reserve Bank of India’s dovish tone in its latest monetary review has also buoyed consumer sentiment, enabling better spending flexibility among the middle class. Gold exchange-traded funds (ETFs) have seen minor inflows this week, further solidifying the bullish undertone.

Market Indicators & Technical Analysis

RSI and MACD:

• RSI (Relative Strength Index): 62 – Gold is not yet in overbought territory, which means there could still be room for upward movement.

• MACD (Moving Average Convergence Divergence): Bullish crossover seen on daily chart, suggesting potential continuation of rally.

Support and Resistance:

If the price holds above ₹92,000 over the next two sessions, analysts anticipate a possible breakout to ₹94,000+ by next week.

What Analysts Are Saying

Zee Business highlighted the rebound in its commodities report, emphasizing how geopolitical pauses often lead to short-term gold surges. Meanwhile, Reuters pointed out that investor positioning in U.S. gold futures saw a notable uptick, suggesting institutional players are not writing off the rally yet.

“Traders should watch U.S. employment data and inflation releases this week. Any signs of Fed dovishness will reinforce gold's gains,” noted a Reuters market analyst.

Intermarket Dynamics: Crude, Dollar, and Inflation

Gold’s performance this week is also being indirectly supported by easing oil prices. Brent crude has fallen below $85/bbl, reducing inflationary concerns globally. In turn, this has softened the U.S. dollar slightly, making gold more affordable for non-dollar economies.

Moreover, with U.S. Fed officials signaling a pause in rate hikes, the macro environment is subtly turning gold-friendly once again.

Risks and Reversal Possibilities

While momentum is positive, traders are advised to remain cautious of:

1. Stronger-than-expected U.S. job data, which could reignite fears of rate hikes.

2. Sudden demand slump post-Golden Week, which may expose gold to correction risk.

3. Volatility in crude oil prices, which could indirectly pressure bullion.

Technical indicators also show gold nearing its short-term resistance zone, warranting tight stop-loss management for intraday or leveraged positions.

Gold Investment Tips for May 2025

Here are a few insights for retail investors and gold buyers:

• Systematic Investment: Consider SIPs in gold ETFs rather than lump-sum buys.

• Buy on Dips: Look for consolidation near ₹91,000–₹91,500 levels to enter.

• Track Global Events: Monitor U.S. Fed commentary, China’s reopening post-holiday, and dollar index for directional cues.

For jewellers and bulk buyers, prices above ₹93,000 could lead to demand compression. A buy-on-dips strategy remains the safest route this month.

Key Upcoming Events to Watch

Any surprises in these macro data points could determine gold’s short-term trend trajectory.

Final Thoughts

Gold’s rebound to ₹92,629/10g marks an important turning point for the precious metal after weeks of uncertainty. While global trade tension relief and China’s Golden Week provided the initial thrust, continued buying in India and cautious optimism from investors are sustaining the rally.

For now, the gold market appears poised for a gradual climb—but investors must remain vigilant as global macro winds shift. Patience, diversification, and technical discipline are the key themes for bullion watchers in May 2025.