Today's gold rate: Despite the economic uncertainties caused by US President Donald Trump's tariff tirade and the Indian National Rupee's (INR) depreciation, investors will continue to find refuge in the precious yellow metal for the next six weeks. After reaching a fresh high of ₹85,279 per 10 gm, the MCX gold rate leveled off at ₹84,900 per 10 gm. The price of gold increased by more than ₹2,500 per 10 gm every week, while the price of precious bullion has increased by more than ₹8350 per 10 gm during the past six weeks (exactly ₹84,900 - ₹76,544 = ₹8,356), or almost 10.90%. Internationally, gold prices stayed steady, climbing for six weeks in a row to hit the $2,886 per ounce milestone in the spot markets.
Causes of the Gold Price RallyAnuj Gupta, Head of Commodity & Currency at HDFC Securities, discussed the factors driving gold prices over the past six weeks: "Since the final week of December 2024, gold prices have been rising. The initial catalyst was the US Fed rate decrease rumors, which gained more momentum in the run-up to Donald Trump's inauguration as the 47th president of the United States. The precious yellow metal was able to maintain its safe-haven status in the global market due to economic uncertainty and the threat of a trade war brought on by Donald Trump's protectionist policies. The depreciation of the Indian Rupee contributed to the increase in gold prices on the domestic market.
"The recent spike in gold prices can be largely attributed to the safe haven demand as Trump administration imposed 10% import tariffs on China and threatened to levy 25% import tariffs on Mexico and Canada," explained Sugandha Sachdeva, Founder of SS WealthStreet, in an explanation of the role of various triggers in the ongoing gold price rally. With 40% of all trade in goods worth about $2 trillion, these three are the US's major trading partners. The US-Sino trade war may intensify as a result of China's retaliatory tariffs and other export control measures.
Next week, President Trump intends to put tariffs on a number of other nations. Gold is becoming more appealing as economic uncertainty rises.
Middle Eastern Geopolitical Tension
Sugandha Sachdeva pointed out that anxieties about geopolitical threats in the Middle East have increased as a result of US President Donald Trump's remarks on plans for the Gaza Strip. Additionally, this has helped the gold price rise in recent sessions.
Central Bank Rate Cuts Recent rate cuts by major central banks have also helped gold. In the past six months, the Bank of England has increased its rate decrease by 25 basis points to 4.50% for the third consecutive time. Additionally, the European Central Bank lowered its interest rates to 2.75%, a 25 basis point decrease. Additionally, the Bank of Canada lowered its interest rate by 25 basis points. Furthermore, after five years, the Reserve Bank of India lowered interest rates, modifying the repo rate to 6.25% from the long-standing 6.5%," Sugandha Sachdeva said.
The recent World Gold Council report, according to the SS WealthStreet analyst, has given the yellow metal even more luster. According to the analysis, greater central bank purchases and increased investment demand caused world demand to climb by 1% to a record 4,974.5 metric tons in 2024.
Poor US Jobless Statistics
"The US unemployment rate has hit its lowest since May 2024 as the US economy could add only 1,43,000 jobs in January 2025 while the market expectations were 1,69,000." Anuj Gupta of HDFC Securities pointed to economic uncertainties. As a result, the US unemployment rate dropped to 4% from the market's estimated 4.10 percent. Investors now have more concerns about the US economy as a result of this dismal job report.
Prospects for the price of gold
"Technical structure suggests an overall positive bias in gold prices, but some corrective waves could be seen," Sugandha Sachdeva said, predicting additional price increases. A pullback may occur since prices have gotten close to the upper end of the Bollinger band and the RSI is indicating an overbought situation. A starting price of about ₹83,800 per 10 gram was found. Further drops near the ₹83,300 per 10 gm mark may be observed if this threshold is broken.
Sugandha Sachdeva made the following advice to gold investors regarding the current rally: Although there are many favorable factors supporting gold's recent highs, investors should be aware of possible declines and keep a close eye on important support levels.
Poor US Jobless Statistics
"The US unemployment rate has hit its lowest since May 2024 as the US economy could add only 1,43,000 jobs in January 2025 while the market expectations were 1,69,000." Anuj Gupta of HDFC Securities pointed to economic uncertainties. As a result, the US unemployment rate dropped to 4% from the market's estimated 4.10 percent. Investors now have more concerns about the US economy as a result of this dismal job report.
Prospects for the price of gold
"Technical structure suggests an overall positive bias in gold prices, but some corrective waves could be seen," Sugandha Sachdeva said, predicting additional price increases. A pullback may occur since prices have gotten close to the upper end of the Bollinger band and the RSI is indicating an overbought situation. A starting price of about ₹83,800 per 10 gram was found. Further drops near the ₹83,300 per 10 gm mark may be observed if this threshold is broken.
Sugandha Sachdeva made the following advice to gold investors regarding the current rally: Although there are many favorable factors supporting gold's recent highs, investors should be aware of possible declines and keep a close eye on important support levels.
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