As of today, gold prices are experiencing a notable rally, largely driven by escalating tariff concerns under US President Donald Trump’s policies and the ongoing uncertainty in global markets. Here’s an overview of the factors influencing the price movements:
MCX Gold Price (India)
Opening Price: ₹86,139 per 10 grams
Intraday High: ₹86,271 per 10 grams
Close (Yesterday): ₹86,152 per 10 grams
Gold is sustaining above ₹86,000 per 10 grams in the domestic market, with the rally being fueled by multiple global factors.
International Gold Market
Spot Gold Price: $2,918 per ounce
COMEX Gold: $2,924 per troy ounce
Key Drivers Behind the Gold Price Rally
Weak US Dollar
A weak US dollar has been a significant driver for gold’s price increase. Despite the US dollar index rising by 0.25%, it remains weak around the 103.50 mark, signaling continued pressure on the currency.
Investors are closely watching the US dollar’s movement, as a weaker dollar makes gold more appealing.
US Tariff Flare
President Trump’s tariff hike on Canadian steel and aluminum imports, escalating tensions with Canada’s largest trading partner, has led to a decrease in US equities and a fall in the US dollar, further boosting gold prices as a safe haven.
The tariff news has led to market volatility, driving more investors toward gold.
Economic Uncertainty
The latest economic data, particularly weak US CPI figures, have raised expectations that the Federal Reserve might cut interest rates. This expectation is further lifting gold’s appeal, as lower interest rates reduce the opportunity cost of holding non-yielding assets like gold.
Trade Tensions and Inflation Fears
Ongoing trade tensions, especially with Trump’s tariff moves, along with fears of stagflation (inflation coupled with economic slowdown), have increased the demand for gold.
This environment of economic uncertainty is creating a “constructive scenario” for higher gold prices in the coming months, especially as talks of a potential recession in the US grow louder.
Gold Price Outlook
Analysts are forecasting a potential trading range for gold in the near term between ₹85,000 and ₹86,500.
Prithviraj Kothari, MD of RiddiSiddhi Bullions, points out the tug-of-war between bulls and bears in the gold market, with key data such as US inflation figures and the Ukraine ceasefire talks likely to impact future gold prices.
Conclusion
The combination of a weakening US dollar, trade uncertainties, tariff flare-ups, and the potential for lower interest rates due to economic slowdowns all support gold’s bullish outlook. Traders are advised to keep an eye on the movement of the US dollar and key economic data to gauge where gold prices may head next.
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