 "Jewellery is displayed at the Gold Souk market in Dubai, United Arab Emirates, March 14, 2025. File Image/Reuters")
Gold prices have surged to new all-time highs as the global economy reacts to US President Donald Trump’s newly announced tariff measures .
These tariffs, which impose baseline duties on imports from multiple nations, have heightened trade tensions and led to increased volatility in financial markets.
As investors seek safe-haven assets, gold has become the prime choice, pushing prices to unprecedented levels.
On the Multi Commodity Exchange (MCX), gold with a June 2025 expiry touched an all-time high of Rs 91,423 per 10 grammes. The contract was trading at Rs 90,782 per 10 grammes, marking a rise of 0.06 per cent.
This milestone brings the anticipated Rs 1,00,000 per 10 grammes target closer than ever, sparking discussions on whether the price will breach this mark in the coming financial year.
In India, the price of 24-karat gold reached Rs 93,380 per 10 grammes, while 22-karat gold stood at Rs 85,600 per 10 grammes.
Gold in 18-karat purity was priced at Rs 70,040 per 10 grammes, while 1 gramme of gold cost Rs 9,338 for 24-karat, Rs 8,560 for 22-karat, and Rs 7,004 for 18-karat gold.
At the international level, spot gold recorded a peak price of $3,167.57 per ounce, before settling at $3,145.93 per ounce, according to Trading Economics.
Gold futures in the US also reflected this trend, rising by 0.1 per cent to $3,170.70 per ounce.
Impact of Trump’s tariffs on global trade
The price surge in gold coincides with the announcement of new US tariffs that have significantly altered the global trade landscape. Trump introduced a 10 per cent baseline tariff on all imports into the United States, with steeper rates for key trade partners .
China faces a 34 per cent tariff, the European Union 20 per cent, and Japan 24 per cent. Additionally, foreign-made automobiles are now subject to a 25 per cent tariff, with further duties on automotive parts set to begin in May.
The Trump administration’s move is aimed at boosting domestic manufacturing and reducing trade deficits. “PM Modi is a good friend of mine, but India has a 55 per cent tariff on US imports, so we are imposing a 26 per cent Discounted Reciprocal Tariff on India ,” Trump said.
The imposition of tariffs has led to uncertainty across financial markets, as investors evaluate its long-term implications.
According to Saurabh Gadgil, Chairman and Managing Director of PNG Jewellers, the US tariff on Indian jewellery imports will increase from the current 5.5 per cent to 10 per cent, reported News18.
While this will affect Indian jewellery exporters, Gadgil noted that India itself does not import substantial amounts of gold or jewellery from the US.
Instead, the US imports significant commodities from Asia, and these goods will become more expensive due to the tariffs. “This policy will impact not just the US but the entire global economy. The reciprocal reactions from affected nations remain to be seen,” he added.
Other factors fuelling gold’s rise
Gold’s rise has been fuelled by multiple factors, including expectations of interest rate cuts, strong central bank purchases, and increased demand for gold-backed exchange-traded funds (ETFs). Trading Economics data indicates that China’s gold-backed ETF alone added 233,000 ounces.
The weakening US dollar and declining bond yields have also contributed to the bullish gold market. The US dollar index and 10-year bond yields have fallen to five-and-a-half-month lows, making gold more attractive as an investment.
A lower yield environment reduces the opportunity cost of holding non-yielding assets like gold, further bolstering its appeal.
Despite gold’s record-breaking rally, silver has not followed the same trajectory. The price of silver fell sharply, with MCX silver dropping by Rs 2,133, or 2.14 per cent, to trade at Rs 97,620 per kg.
In the retail market, silver prices declined by Rs 2,000 per kg, bringing the price to Rs 1,03,000 per kg. The price of 1 gramme of silver was recorded at Rs 103 in the spot market.
On the global stage, spot silver dropped 2.8 per cent to $33.07 per ounce, while platinum declined 1.5 per cent to $968.37 per ounce, and palladium slipped 1.4 per cent to $956.50 per ounce.
Will gold rise more?
The trajectory of gold prices will also depend on key economic data releases and policy decisions by the Federal Reserve. The latest US labour market data showed private payrolls increasing more than expected in March, but economists believe the broader labour market is losing momentum.
Investors are closely monitoring the upcoming US non-farm payrolls report for further insights into the Federal Reserve’s policy stance.
If the Federal Reserve signals a move toward lowering interest rates, it could further strengthen gold’s appeal.
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Market analysts caution that while gold has seen a sustained rally, short-term price corrections cannot be ruled out. Until a significant shakeout occurs, this trend is likely to continue.
Analysts suggest that maintaining a portion of investments in gold could provide stability against financial market fluctuations.
With inputs from agencies