Gold Prices Surge Amid Economic Uncertainty

In the early hours of Tuesday, gold prices in the domestic futures market witnessed a modest increase. This uptick can be attributed to ongoing uncertainties surrounding U.S. President Donald Trump’s tariff policies, a rise in demand within the spot market, and a stable performance of the U.S. dollar. As of 9:10 AM, the MCX Gold for April 4 contracts rose by 0.19%, reaching ₹87,445 per 10 grams.

Factors Influencing Gold Prices

Gold’s value is often influenced by geopolitical tensions, economic policies, and market stability. Currently, several factors are driving the price of gold:

• Trump’s Tariff Policies: The unpredictability stemming from Trump’s trade policies has led to increased demand for gold, a traditional safe haven during times of uncertainty.
• Federal Reserve Rate Expectations: The anticipation of potential rate cuts by the U.S. Federal Reserve is another element supporting gold prices. However, persistent inflation concerns may temper the pace of these cuts.

Despite this increase in futures, domestic spot gold prices have declined for five consecutive sessions, dropping by roughly ₹1,000 due to the absence of fresh catalysts and a stable dollar index.

Trump’s Recent Statements on Tariffs

On Monday, Trump hinted that not all tariffs might be implemented as initially planned on April 2. He specified that automobile tariffs would be introduced soon, but some countries might receive exemptions. This statement adds to the already existing uncertainty in the market.

Expectations from the Federal Reserve

Recent comments from Atlanta Federal Reserve President Raphael Bostic suggest a cautious outlook for interest rate adjustments. He forecasts only a 25 basis points rate cut by year-end, reflecting a belief in sluggish progress on inflation. The upcoming Personal Consumption Expenditures (PCE) index data, which the Fed closely monitors, is expected to serve as a near-term catalyst for gold prices.

Expert Insights on Trading Strategies

Market analysts are keeping a close eye on gold and silver prices as volatility remains a constant theme. Manoj Kumar Jain from Prithvifinmart Commodity Research recommends a selling strategy for gold around ₹87,500, with a stop-loss at ₹87,800 and a target of ₹86,950. He anticipates continued fluctuations in response to movements in the dollar index and trade tensions.

Here’s what experts predict for gold and silver:

• Gold Support & Resistance:

  • Support: ₹87,000 – ₹86,650
  • Resistance: ₹87,550 – ₹87,800
• Silver Support & Resistance:
  • Support: ₹96,650 – ₹96,100
  • Resistance: ₹98,000 – ₹98,850

Meanwhile, Rahul Kalantri, VP of commodities at Mehta Equities, echoes similar sentiments. He identifies gold support levels at $2,988 – $2,970 and resistance at $3,028 – $3,048. For silver, support is projected at $32.75 – $32.55, with resistance at $33.24 – $33.48.

Conclusion

With ongoing volatility in both the gold and silver markets, traders should remain vigilant and prepared to adapt their strategies as new data emerges. The interplay of economic policies, market demand, and geopolitical factors will continue to shape the landscape for precious metals in the coming weeks.

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