As tensions between the United States and China escalate, gold prices have surged to unprecedented heights both domestically and internationally. The recent shifts in Donald Trump’s tariff policies have contributed to a weakening of the US dollar, prompting investors to flock to gold as a safe haven. On the domestic front, MCX gold rates soared to ₹93,940 per 10 grams during trading on Friday, eventually settling at ₹93,887 per 10 grams—a notable increase of 6.53% from the previous week.
Gold Prices on the Rise
The international gold market mirrored this trend, with spot gold reaching a high of $3,245 per ounce before closing at $3,236.21. This reflected a weekly gain of 6.41%. The recent downturn of the US dollar index, which fell below 100 for the first time in two years, has been a significant factor in this gold rally, closing at 99.89, down 0.72% on Friday.
- MCX Gold Rate: ₹93,887 per 10 gm
- Spot Gold Price: $3,236.21 per ounce
- Weekly Gain: 6.53% (MCX), 6.41% (Spot)
Factors Driving Gold Prices Higher
Market analysts attribute the surge in gold prices to a variety of factors, chiefly the escalating tensions in the US-China trade war and the recent depreciation of the US dollar. According to Sugandha Sachdeva, founder of SS WealthStreet, these developments have caused significant fluctuations in the market, leading to a spike in gold demand. She explains, “The recent tariff policies have created a ripple effect, affecting both the dollar and investor sentiment toward gold.”
Jateen Trivedi, VP of Research at LKP Securities, notes that geopolitical uncertainties and tariff disputes are pushing investors toward gold. He states, “Despite the strength of the Indian rupee, ongoing tensions are causing a bullish sentiment around gold.”
The Impact of the US-China Trade Conflict
The trade conflict between the US and China continues to be a critical driver for gold prices. Both nations have imposed substantial tariffs—up to 145% from the US and 125% from China—sparking fears about global economic stability. This environment of uncertainty has led investors to prioritize gold as a secure investment option.
Anticipation of US Federal Reserve Rate Cuts
Additionally, expectations surrounding potential rate cuts by the US Federal Reserve are influencing gold’s appeal. Recent data indicating slower-than-expected consumer price growth has led many to believe that the Fed may lower rates, making non-yielding assets like gold more attractive. According to Sachdeva, “Lower interest rates diminish the opportunity cost of holding gold, which could further elevate its value.”
Future Outlook for Gold Prices
Looking ahead, analysts predict that gold may break through significant resistance levels. Jateen Trivedi suggests that gold is poised to approach the ₹94,500 to ₹95,000 range, with a crucial support level at ₹92,000. On the international front, the price of gold could potentially target $3,280 to $3,320 per ounce.
- Resistance Levels: ₹94,500 to ₹95,000
- Support Level: ₹92,000
- Future Price Targets: $3,280 to $3,320 per ounce
In conclusion, as geopolitical tensions grow and economic indicators signal potential shifts in monetary policy, gold remains a focal point for investors seeking refuge amidst uncertainty. With strong upward momentum, both domestic and international markets are likely to see continued interest in this precious metal.
