Gold Price Today: MCX gold drops 6% on profit booking amid dollar strength

We begin with the biggest market move today. MCX gold futures fell sharply, down about 6% on profit booking and a stronger U.S. dollar. This caught many traders by surprise and pushed gold prices lower on the Multi-Commodity Exchange. Gold matters. It is a key asset for millions of investors in India and around the world. It’s used as a hedge during uncertainty. It is also an inflation hedge and a safe‑haven asset. So, when gold prices swing, markets watch closely.

Today’s Gold Price Movement

• MCX Gold Slide: MCX gold futures dropped nearly 6% today compared to the previous session, showing a sharp single-day fall.
• Recent Highs: Prices had been strong before the drop, with gold reaching record levels in some reports and silver crossing ₹4 lakh/kg.
• India Jewellery Demand: Gold jewellery demand in India fell 24% in 2025, even as prices hit new highs.
• Global Demand: Worldwide, gold demand hit a record 5,002 metric tons in 2025, led by investors and ETFs.
• Market Focus: These numbers show gold remains in focus despite short-term corrections.

Drivers Behind the Drop

• Profit Booking: Many traders sold gold contracts to lock in gains after weeks of rally. This led to a quick 6% price drop today.
• Dollar Strength: Gold is priced in USD. A stronger dollar makes gold costlier in other currencies, reducing demand. Today’s dollar strength pushed gold lower.
• Global Cues: Expectations of higher U.S. interest rates and safe-yield demand strengthened the dollar. These forces combined to pressure gold prices.

Expert Insights and Market Reactions

• Short-Term Correction: Analysts say today’s drop is a short-term correction, not a long-term decline.
• Profit Booking Normal: Gold had been near record highs. Fast gains often trigger profit-taking by funds and traders.
• Fed Influence: Traders monitor U.S. jobs, inflation, and Federal Reserve comments to predict gold movement.
• Rate Impact: If the Fed signals higher rates, the dollar strengthens,  and gold can weaken. If rates ease, gold may rise.

Implications for Investors

• Long-Term Investors: We from the investment community see this as a potential buying opportunity. Gold demand remains strong globally. Global demand hit record levels in 2025.
• Traders: Short-term traders should watch the dollar index, set stop-losses, and track historical support levels. Profit booking can increase volatility.
• Domestic Buyers: Jewellery buyers faced high prices in 2025. Lower demand suggests waiting for dips may be wise.

Broader Trend: Gold Demand Still Strong

• Global Demand: Despite today’s drop, the long-term trend remains strong.
• Record 2025: World Gold Council reports global gold demand hit an all-time high of 5,002 metric tons in 2025.
• Underlying Strength: Even with short-term corrections, safe-haven and investment demand keep gold attractive.

Conclusion

Today’s fall in gold prices was mainly driven by profit booking and a stronger U.S. dollar. The 6% drop on the MCX reflects traders locking in gains after a strong rally over recent weeks. While this decline may appear sharp, it is more of a short-term correction than a long-term trend reversal. Global demand for gold remains robust, with the World Gold Council reporting record-high consumption in 2025, driven by investment inflows and safe-haven buying. For investors, this correction offers an opportunity to reassess positions and consider long-term strategies, keeping an eye on key economic indicators such as U.S. interest rates and dollar strength. Despite short-term volatility, gold continues to hold its appeal as a hedge against uncertainty and a core component of diversified portfolios.

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The content shared by Meyka AI PTY LTD is solely for research and informational purposes. Meyka is not a financial advisory service, and the information provided should not be considered investment or trading advice.