MUMBAI: Fears of a global trade war fears which took gold to record levels in international markets combined with a weakening rupee on Monday pushed the price of the yellow metal to about Rs 84,500-per-10-gram level on Multi Commodities Exchange. In the city’s physical bullion market, the price hovered around the Rs 82,500 level. These are highest-ever levels for the precious metal in India, data from the exchange and physical markets showed.
Gold prices have been on the boil since Donald Trump’s inauguration as US President as he threatened tariffs on some of the country’s biggest trading partners.
“Bullion is considered a safe investment during periods of economic and geopolitical turmoil,” said Prathamesh Mallya of brokerage firm Angel One. Last week, US Federal Reserve chief Jerome Powell said there would be no rush to cut interest rates again, contradicting Trump’s earlier calls saying he wants borrowing costs to be lowered. And since Saturday, US’s imposition of tariff on China, Mexico and Canada, and the resultant retaliatory moves have heightened market volatility globally.
In international markets, gold price has moved up from $2,730 on Jan 20 to $2,864 in mid-session on Monday on Comex, a rise of 5%.
According to Kaynat Chainwala of Kotak Securities, the yellow metal was supported by rising demand for safe-haven assets in the last couple of weeks, driven by escalating trade war fears and the prospect of global retaliation. “Despite brief pressures from profit-taking and a stronger dollar, gold remained resilient, bolstered by easing monetary policies from central banks and ongoing economic uncertainty.”
On Saturday, the US imposed a 25% tariff on goods from Mexico and Canada, and 10% on goods from China. These key trading partners are now preparing to retaliate by hiking tariffs.
About The Author
