May 3, 2025 – Gold prices cooled in the first week of May, falling to a two-week low of $3,211.53 per ounce on May 1, then showed a slight recovery to $3,255.01 by May 2, based on recent market data. The 2.1% weekly decline was the largest drop since late February, but analysts are not overly concerned. In fact, many are confident in gold’s long-term potential, and some predict that gold prices could reach $4,000 per ounce, as global economic and geopolitical uncertainty keeps investor demand strong.
A pause after a spectacular performance
Gold has performed stellar this year, with a 25% gain** so far in 2025 and a nearly 27% gain, which is on par with 2024’s 27% gain. However, gold’s safe-haven appeal has temporarily taken a back seat recently. Expectations of some sort of breakthrough in the U.S.-China trade talks and a better-than-expected U.S. jobs report have turned investors to riskier assets.
Another factor adding to the downward pressure is the strengthening U.S. dollar and China’s Labor Day holiday (May 1–5), which halted gold buying in China, one of the world’s largest markets.
In India, a major gold-consuming country, gold prices rose to ₹92,629 per 10 gram on the Multi Commodity Exchange (MCX) on May 2, showing a slight recovery after a recent **6,700 drop. The decline came ahead of *Akshaya Tritiya* (April 30), when the price of 24K gold was tied at 94,390 per 10 gram. “Prices remained volatile despite festive demand, but buyers are attracted to the long-term value of gold,” said a Mumbai-based jeweler.
Why the decline?
Market analysts say there are several reasons behind the recent decline.
“We are seeing profit-taking following the rally in gold,” said Bob Haberkorn, senior market strategist at RJO Futures. “The market is in a risk-on mood as there is some hope in trade talks, but gold is still an important player in case uncertainty re-emerges.”
Independent metals trader Tai Wang also echoed this sentiment, saying gold is still in a bullish market although it is consolidating in the short-term.
All eyes are now on the U.S. economy. GDP fell 0.3% on an annual basis in the first quarter, raising the possibility that the Federal Reserve may cut interest rates—which usually benefits gold, as it shines in a low-interest rate environment. Investors are now looking ahead to the U.S. Nonfarm Payrolls report, which could influence the Fed’s next steps.
“If the jobs report is disappointing, we could see gold rebound quickly,” Wang said.
Golden Prediction?
Looking ahead, analysts are positive for gold in May and beyond. A recent Reuters survey says gold prices could average above $3,000 an ounce in 2025—a historic milestone, driven by continued trade tensions and a global exodus from the U.S. dollar. Some analysts believe prices could reach $4,000 if tariff-related uncertainty persists. However, they warn that commodity market predictions always come with a certain risk.
Technical analysts are eyeing key levels.
“Gold is holding crucial support around $3,200,” said a DailyForex report. “If it breaks above \$3,500 it could extend the rally again, but if it drops below \$3,200, it could point to more downside.”
Gold remains a highly valued asset in India. Gold prices have doubled in the last five years, rising from ₹47,677 per 10 grams in April 2020 to ₹95,592 in April 2025. “Gold is important in India both culturally and financially,” says Mumbai-based commodity expert Anuj Gupta. “Now more investors are moving towards digital gold options such as ETFs and government gold bonds, to avoid storage costs and GST.”
What next for May?
After China’s market holiday, gold demand may get a boost. U.S.-China trade talks—which are undergoing a 90-day pause period ending in July—will play a key role in shaping the market.
Gold-backed ETFs saw inflows of 227 tonnes in the first quarter of 2025, the highest since 2022. This proves that investor interest in gold is still strong.
Going forward, gold’s direction will mainly depend on incoming economic data and changes in global sentiment. “It’s a volatile market, but gold is clearly standing on its feet,” said analyst Bob Haberkorn. Experts are still recommending portfolio diversification, with some saying silver also has strong growth potential as an overall asset.
As May progresses, gold will continue to be a symbol of stability in a volatile global economy. Whether you are in India for cultural reasons, you may not be able to hold gold for long.
