Gold prices in India have remained strong, consolidating after reaching a new record high on Tuesday. As of early Wednesday, gold is trading slightly higher, with the price per gram at INR 8,583.84, up from INR 8,572.42 on Tuesday. The price of gold per tola has also risen to INR 100,120.70 from INR 99,986.97 the previous day, reflecting growing investor confidence in the precious metal as a safe-haven asset.
Gold’s Safe-Haven Appeal Amid Tariff Uncertainty
Gold’s recent rally has been largely driven by concerns over U.S. President Donald Trump’s trade policies, particularly the looming announcement on April 2 regarding tariffs. The potential economic fallout from these policies has kept investors cautious, leading them to seek the stability of gold. As a traditional safe haven, gold has been benefiting from this uncertainty, and investors are watching closely for any updates on the tariff situation.
Despite the slight pullback in gold’s price overnight from a fresh all-time high, it remains well-supported. This price action signals a phase of consolidation ahead of the anticipated tariff announcements. Investors seem to be holding off on placing fresh bets until more clarity is provided, but the overall sentiment towards gold remains positive.
Economic Data Fuels Gold’s Uptrend
Recent U.S. economic data has added fuel to gold’s upward momentum. Disappointing macroeconomic figures have raised concerns about potential stagflation, with inflation remaining high and economic growth slowing. The U.S. ISM Manufacturing PMI, for example, dropped from 50.3 to 49 in March, indicating that business activity contracted for the first time in three months. Additionally, factory gate inflation reached its highest level in nearly three years, while the Employment Index showed a decrease in manufacturing sector payrolls.
The Job Openings and Labor Turnover Survey (JOLTS) also revealed a drop in job openings to 7.56 million, down from 7.76 million in January. This data, combined with expectations that the Federal Reserve could resume its rate-cutting cycle in June, has weighed on the U.S. Dollar, which in turn benefits gold. Market participants are pricing in an 80 basis-point rate cut this year, further strengthening gold’s appeal as a non-yielding asset.
What to Expect Next for Gold Prices
While the bullish sentiment remains, traders are hesitant to make significant moves ahead of Trump’s impending tariff announcements. There are concerns that equity markets could be overbought, which may temper any immediate price spikes in gold. However, the expectation of a rate cut from the Federal Reserve continues to provide support for the yellow metal.
Investors will also be paying close attention to upcoming U.S. data, such as the ADP private-sector employment report and Factory Orders data, which could provide further insights into the state of the U.S. economy and impact the strength of the U.S. Dollar. These developments could either reinforce gold’s positive momentum or lead to a pause in the rally, depending on the market’s reaction.
Overall, gold prices in India and globally remain buoyant, with tariffs and economic uncertainty continuing to shape the market’s outlook. Gold’s appeal as a safe haven remains intact, and the $3,100 per ounce level could continue to provide crucial support.
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