Gold Prices Surge Amidst Economic Concerns

In the early hours of Monday, gold prices soared, reclaiming the crucial ₹86,000 benchmark. This surge comes in the wake of a weakening US dollar, escalating fears surrounding US inflation, and a rising demand for the precious metal as a safe haven. The Multi Commodity Exchange (MCX) witnessed gold futures for April 2025 opening at ₹85,981 per 10 grams, quickly reaching an intraday high of ₹86,074 shortly after trading began.

International Gold Market Trends

On the global stage, gold maintained its stronghold, trading above $2,900 per ounce. Currently, the spot price for gold stands at $2,910 per ounce, while COMEX gold is priced at $2,15 per troy ounce.

Economic Indicators Influencing Gold Prices

According to Sugandha Sachdeva, the Founder of SS WealthStreet, recent economic data has stirred concerns about a potential slowdown in growth and inflation risks. "These factors could compel the US Federal Reserve to implement further monetary easing," she noted, emphasizing that this would likely weaken the US dollar and bolster gold prices—an asset that does not yield interest.

Recent statistics reveal that 151,000 new jobs were added in February, falling short of expectations. Additionally, the unemployment rate inched up to 4.1%, suggesting a possible slowdown in the labor market.

Local Market Dynamics

Despite a buoyant sentiment in the equity markets—especially around AI stocks—the local gold price has captured attention. The Baidu Search Index for "gold" has surged to its highest level since 2013, indicating heightened public interest.

Key Resistance Levels for Gold

Looking at the MCX gold rates, Sachdeva pointed out that today’s gold prices face crucial resistance in the ₹86,350 to ₹86,600 range. A successful breakout could propel prices towards the ₹87,500 mark, while failure to breach this resistance may trigger a downward correction, with support levels at ₹84,300 and ₹83,500.

Focus on Gold ETFs

Data from the World Gold Council (WGC) shows that global gold exchange-traded funds (ETFs) experienced consistent inflows throughout February, with total investments increasing across all regions. Notably, investors in Asia invested aggressively in gold ETFs, contributing $2.3 billion in February alone.

Amid ongoing stock market uncertainties, affluent investors are choosing gold ETFs over physical gold purchases. The year 2025 has already seen remarkable inflows into gold ETFs.

In India, while gold ETF inflows remained robust, they have slightly tapered compared to the record highs of January. Inflows from China were particularly noteworthy, leading the investments, while Japan continued its trend of inflows for the fifth consecutive month. Other regions also reported gains, with Australia enjoying its strongest month since September 2024 and South Africa recording positive trends.

Conclusion

The sustained downturn in equity markets has further driven investments towards gold ETFs, as investors seek the safety of gold. "We have witnessed three consecutive months of significant global inflows which, alongside a rising gold price, have increased total assets under management (AUM) to $306 billion," the WGC stated.

With these evolving dynamics, gold continues to be a focal point for investors navigating uncertain economic waters.