Gold Prices Surge to Record High Amid US-China Trade Tensions
Gold Reaches Unprecedented Levels
New Delhi: On Wednesday, gold prices surged by Rs 1,650, reaching an all-time high of Rs 98,100 per 10 grams in the national capital. This spike is attributed to a global trend of safe-haven buying, prompted by escalating trade tensions between the United States and China.
The All India Sarafa Association reported that gold, with a purity of 99.9%, had closed at Rs 96,450 per 10 grams the previous day.
This increase marks the most significant single-day rise since April 11, when prices jumped by Rs 6,250 in local markets.
Since the beginning of the year, gold prices have risen by Rs 18,710, reflecting a 23.56% increase from the January 1 price of Rs 79,390 per 10 grams.
Gold with 99.5% purity also saw a rise of Rs 1,650, reaching a new high of Rs 97,650 per 10 grams, compared to the previous closing of Rs 96,000.
In addition, silver prices increased by Rs 1,900, reaching Rs 99,400 per kg, up from Rs 97,500 per kg on Tuesday.
On the Multi Commodity Exchange, gold futures for June delivery rose by Rs 1,984 or 2.12%, hitting a record high of Rs 95,435 per 10 grams.
Jateen Trivedi, VP Research Analyst at LKP Securities, noted, "Gold has shown a robust rally, with MCX gold reaching landmark levels of Rs 95,000, while Comex gold surpassed USD 3,300, indicating strong demand for safe-haven assets."
The rally is largely driven by geopolitical uncertainties and a lack of progress in tariff negotiations between the US and China. Trivedi indicated that gold prices are likely to remain high until there is a clear indication of de-escalation.
Globally, spot gold reached a record high of USD 3,318 per ounce before settling at USD 3,299.99 per ounce.
Kaynat Chainwala, AVP-Commodity Research at Kotak Securities, stated, "Gold's surge to record highs is fueled by increasing trade war concerns following the US government's tightening of export regulations to China."
President Donald Trump has initiated an investigation into the necessity of tariffs on critical minerals, further heightening market anxiety. On Wednesday, the US administration raised tariffs on most Chinese goods to 245%.
Chintan Mehta, CEO of Abans Financial Services, explained that gold prices have reached record levels as the US dollar index fell below the 100-mark, nearing three-year lows.
He added that the rise in gold prices is supported by expectations of a potential interest rate cut, with markets closely monitoring an upcoming speech by US Federal Reserve Chair Jerome Powell.
Experts believe that Powell's remarks will provide insights into the future of interest rates, which will significantly impact US dollar dynamics.
"As the Federal Reserve faces the dual challenges of fostering economic growth while managing inflation driven by tariffs, the current macroeconomic environment continues to favor gold," Mehta noted.
"Additionally, major banks maintain a positive outlook on gold, citing ongoing inflows into gold-backed ETFs and sustained purchases by central banks," he added.
During Asian market hours, spot silver rose nearly 2% to USD 32.86 per ounce.
Saumil Gandhi, Senior Analyst at HDFC Securities, mentioned that market participants are now awaiting macroeconomic data, including US retail sales and industrial production, for further insights into the Federal Reserve's interest rate cycle.