Gold Price Prediction for the Week (12 May '25): Should You Buy or Sell?

Factors Influencing Gold Prices

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Gold’s relatively neutral price action this week comes after the Federal Reserve reiterated that it is in no hurry to lower interest rates, as the U.S. economy remains relatively stable and inflation risks remain elevated. 

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Following a roughly 9% drop from its March peak and a brief dip below 98 last month, the US dollar has recovered ground in recent weeks. 

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The rebound has been significantly aided by a softer tone in US-China trade rhetoric, with immediate effects expected as early as this weekend with a meeting between US and Chinese officials in Switzerland.

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After two days of talks in Switzerland to de-escalate a trade war, the United States and China declared "substantial progress". 

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Top Trump administration officials said they achieved a trade agreement with China following two days of talks in Geneva, signalling a potentially huge victory for President Donald Trump in his trade war with Beijing.

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Heading into the weekend trade talks, Trump indicated a readiness to reduce US tariffs on China to 80%, though it was unclear whether either side agreed to lower taxes on the other.

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China's Vice Premier, He Lifeng, praised trade discussions with US officials as "an important first step" towards normalising bilateral trade relations. 

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Additionally, US Treasury Secretary Scott Bessent stated that the two parties achieved "substantial progress." Nonetheless, traders will keep a watch on the contents of the US-China trade discussions, which the US will release on Monday.

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Gold’s Price Trend Prediction for the Week

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The World Gold Council stated that the People's Bank of China increased its gold reserves by 2 tonnes in April for the sixth consecutive month.

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The National Bank of Poland (NBP) increased its reserves by 12 tonnes in April, reaching 509 tonnes, while the Czech National Bank increased its reserves by 2.5 tonnes.

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According to Viren Miyani, partner at Avyukt Commodity, de-escalation of conflict or a reduction in some tariffs would be a stimulus for the sellers to regain power, at least in the near term. Gains have paused in the mid-$3400 (~₹97000) range twice, indicating that the rally may be exhausted in the short run.

If gold prices remain below $3365 (~₹ 94000) this week, they could drop to $3200 (~₹ 92000). If prices go below $3200, the neckline support of the double top formation, we can expect a $200 drop from there to $3000 (₹86000).

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Should You Buy or Sell?

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In the short run, people may think about selling their gold. After going down, the price of gold seems to be stabilising. Things like the US dollar's rebound and progress in trade talks between the US and China are likely to keep pushing gold prices down.

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If gold prices can't stay above $3365 (₹94,000), they might go down even more, and they might hit $3000 (₹86,000).

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Disclaimer: The recommendations and opinions shared by experts regarding the stock market and other asset classes are their own. These views do not reflect the official stance or position of Jar.

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