Shares of Senco Gold surged for the second consecutive session on Tuesday, May 13, hitting the 5 percent upper circuit amid a sharp correction in gold prices , which had recently crossed the ₹1,00,000 per 10-gram mark in India before retreating sharply. The stock reacted positively as investors anticipate improved demand dynamics and easing input volatility following a significant drop in gold rates.
On Monday, gold futures for June 2025 delivery on MCX plunged by more than 4 percent or ₹3,930 to settle at ₹92,588 per 10 grams. In early trade on Tuesday, the metal remained flat, with MCX Gold June 5 contracts up just 0.06 percent at ₹92,955 per 10 grams.
Internationally, gold also traded near a one-week low on Tuesday after plummeting on Monday. The weakness in the yellow metal came as geopolitical tensions eased following a series of breakthroughs in global diplomacy.
Trade Peace Triggers Profit Booking in Gold
The primary driver behind the recent drop in gold prices was the surprise announcement of a trade deal between the United States and China. Both nations agreed to significantly reduce tariffs on each other’s imports for a 90-day period after extensive negotiations in Geneva.
As per the agreement, the US reduced tariffs on Chinese goods from 145 percent to 30 percent, while China slashed duties on US imports from 125 percent to 10 percent. This resolution marks a major de-escalation in global trade tensions and follows a similar deal recently signed between the US and UK.
The calming of geopolitical risks also contributed to gold’s sell-off. A potential truce between Russia and Ukraine and a ceasefire agreement between India and Pakistan have reduced safe-haven demand for gold, prompting heavy profit booking.
“The de-escalation in global trade and geopolitical tensions led to a sharp correction of nearly ₹4,000 in gold prices on the MCX. With the dollar index surging above 101.50, the appeal of gold as a safe haven has diminished. Technically, gold now faces resistance around ₹94,000–95,000, with support near ₹90,000. If the current risk-on sentiment persists, further downside in gold prices cannot be ruled out,” said Jateen Trivedi, VP Research Analyst – Commodity and Currency, LKP Securities.
Stock Performance: Recovery After Months of Weakness
The stock hit its 5 percent upper circuit of ₹369.95. It had hit its upper circuit for the second straight session.
Despite the recent rally, Senco Gold remains significantly below its 52-week high of ₹772, touched in October 2024. However, the stock has rebounded strongly from its 52-week low of ₹227.70, hit in March 2025—gaining more than 62 percent since then.
In the last one year, the stock has declined around 20 percent. However, it appears to be in recovery mode, adding 5.7 percent so far in May after posting a strong 27.5 percent gain in April. This follows a prolonged downtrend that lasted six months, from October 2024 to March 2025, during which the stock lost 62 percent of its value.
Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before making any investment decisions.
