Gold prices saw a rise in the domestic futures market during the morning session on Thursday, February 13, 2025, driven by positive global cues and strong demand from the domestic spot market. The MCX Gold for April 4 contracts opened at ₹85,700 per 10 grams, up from the previous close of ₹85,481, and quickly climbed to ₹85,850 within the first 10 minutes of the trading session. By 9:10 AM, the April contract was trading 0.43% higher at ₹85,848 per 10 grams. This comes after the gold price hit an all-time high of ₹86,360 per 10 grams on February 11, 2025.
International gold prices also saw an upward movement due to heightened safe-haven demand, fueled by growing uncertainty surrounding US President Donald Trump’s trade policies and their global repercussions.
Why Are Gold Prices Rising?
Gold has experienced a nearly 12% surge in domestic spot prices over the past month and a half. Analysts point to three key factors contributing to this rise:
Trade War Concerns: The ongoing trade tensions, primarily driven by US President Donald Trump’s tariff policies, have been a significant factor pushing up gold prices. Experts are concerned that the aggressive tariffs imposed on countries such as China, Mexico, Canada, and the European Union could lead to a global trade war, triggering macroeconomic instability and dampening global economic growth. Gold traditionally performs well during periods of geopolitical and economic uncertainty, which is currently reflected in the market trends.
Central Bank Buying: Central banks around the world have been accumulating gold in large quantities as a hedge against geopolitical risk and inflation. China’s central bank, for example, increased its gold reserves for the third consecutive month in January 2025. In addition, the Reserve Bank of India (RBI) added 72.6 tonnes of gold to its reserves in 2024. According to the World Gold Council (WGC), central banks bought over 1,000 tons of gold for the third straight year, a trend expected to continue in 2025. This growing central bank demand, alongside investment from exchange-traded funds (ETFs), is a key factor supporting gold’s position as a safe-haven asset.
Increased Investment Demand: Amid high inflation and a shaky stock market outlook, retail investors have increasingly turned to gold as a stable investment option. Gold is seen as a reliable hedge against inflation, and its appeal has grown as stock market volatility increases. In January 2025, gold ETFs in India saw record inflows of ₹3,751 crore, marking a 486% increase from the previous month.
Gold Price Outlook and Strategy
The outlook for gold remains closely tied to developments in the US economy. Recent US consumer price index (CPI) data suggests that the Federal Reserve’s path to further rate cuts may be narrower than previously expected. Federal Reserve Chair Jerome Powell indicated that the Fed’s battle with rising inflation is far from over, meaning any future rate cuts could be delayed until inflation approaches the central bank’s 2% target.
Investors are now turning their attention to the upcoming Producer Price Index (PPI) data, which could provide further insights into inflation trends and the Fed’s policy direction.
Commodity experts predict continued volatility in both gold and silver prices this week.
Manoj Kumar Jain of Prithvifinmart Commodity Research forecasts support for gold at $2,914-$2,896 per troy ounce, with resistance at $2,950-$2,970 per ounce. Silver has support at $32.40-$32.16 and resistance at $33.00-$33.30 per ounce. On the MCX, Jain identifies gold support at ₹85,000-₹84,450, with resistance at ₹85,820-₹86,300. Silver is expected to find support at ₹94,750-₹94,000 and resistance at ₹96,200-₹97,000.
Rahul Kalantri, VP of commodities at Mehta Equities, predicts gold support at $2,888-$2,870, with resistance at $2,924-$2,942. For silver, Kalantri sees support at $31.98-$31.78 and resistance at $32.50-$32.72. In INR, he expects gold to find support at ₹85,170-₹84,860, with resistance at ₹85,880-₹86,140. Silver is likely to see support at ₹95,050-₹94,350 and resistance at ₹96,350-₹97,250.
As geopolitical concerns, central bank activity, and inflation trends continue to drive the market, investors and traders are advised to stay vigilant and follow the evolving patterns in both gold and silver prices.
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