Gold prices in India saw a significant rise on Thursday as the intensifying US-China trade war continued to drive demand for the precious metal as a safe-haven asset. Despite a rebound in global stock markets following US President Donald Trump’s announcement of a “90-day pause” on tariffs for most nations, the heightened trade uncertainty pushed gold prices higher.
As of the latest data, gold prices in India stood at INR 8,668.09 per gram, marking an increase from Wednesday’s closing price of INR 8,550.30. The price of gold per tola rose sharply to INR 101,094.90, up from INR 99,728.98 the previous day.
Gold Price in India (per unit)
1 Gram: INR 8,668.09
10 Grams: INR 86,674.05
1 Tola: INR 101,094.90
1 Troy Ounce: INR 269,606.90
Global Market Factors
Gold’s price remained well-supported by the ongoing escalation of the US-China trade conflict. On Wednesday, after new tariffs were introduced, President Trump reversed his stance, announcing a 90-day suspension of duties on most countries. However, he raised the tariff on Chinese goods to 125% in retaliation for China’s decision to impose an additional 50% tariff on US imports.
Investors are increasingly concerned that the trade dispute between the world’s two largest economies could lead to inflationary pressures and hinder global economic growth. This sentiment has kept gold prices on the rise, with the precious metal posting its best performance since October 2023, surging more than 2% on Wednesday. Despite a recovery in equity markets, the momentum for gold remained strong.
Federal Reserve Outlook
In addition to the trade war, the Federal Reserve’s stance on interest rates is also influencing gold prices. Following the release of the March Federal Open Market Committee (FOMC) minutes, traders reduced expectations for more aggressive rate cuts. The minutes revealed that Fed officials expressed concern over rising inflation risks, particularly from tariffs. Several influential Fed policymakers have advocated for a cautious approach to rate cuts, with Minneapolis Fed President Neel Kashkari noting that the case for rate cuts remains high due to potential inflationary pressures from tariffs.
Moreover, other Fed officials, including Cleveland Fed President Beth Hammack and Richmond Fed President Tom Barkin, emphasized the need for caution, warning that tariff-driven price hikes could require the central bank to adjust its monetary policy accordingly. St. Louis Fed President Alberto Musalem further warned against assuming that the Fed could overlook the inflationary impact of tariffs.
Market Expectations
Traders are now pricing in the possibility that the Fed may resume its rate-cutting cycle in June, with a modest reduction of 75 basis points expected throughout the year. However, this has had little impact on the US Dollar, which failed to capitalize on its recent rebound, and did not attract significant selling interest in gold.
Investors are awaiting the release of key US inflation data, including the Consumer Price Index (CPI) and the Producer Price Index (PPI), which are expected to provide new insights into the Fed’s approach to interest rates. These reports will likely influence the US Dollar’s price dynamics and determine the future direction of gold.
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