Gold costs are glittering above the Rs 1 lakh-level per 10 gm for the primary time because the worldwide costs surged after US President Donald Trump unveiled plans to overtake the Federal Reserve. Gold consolidated its place as the perfect protected haven asset within the unstable international monetary markets.
The worth of pure gold (999 fineness) was quoted at Rs 101,350 per 10 gm within the Mumbai bullion market on Tuesday. The worth of twenty-two karat gold was quoted at Rs 92,900 per 10 gm on Tuesday as international markets continued to stay jittery over Trump’s tariff plans and his risk to revamp the US Fed that would result in a spike in inflation and rates of interest.
Why gold costs crossed Rs 1 lakh-mark
Gold costs in India usually observe worldwide costs. World gold costs continued to surge with charges crossing $3,400 an oz even because the US greenback tumbled. Gold has gained almost 59 per cent since March 2024. A weaker greenback boosts demand for gold, because it makes the steel extra reasonably priced to buyers holding foreign currency.
Gold value as we speak in New York is round $3,486.85 per troy ounce. The gold value rally is basically pushed by renewed uncertainty surrounding US financial coverage, after Trump unveiled plans to overtake the Federal Reserve. The US President intensified his assault on Federal Reserve chief Jerome Powell for not reducing rates of interest even because the US greenback sinks within the forex market.
In the meantime, the US Fed issued a warning that tariffs may threaten its twin mandate of sustaining secure costs and full employment, which additional strengthened gold’s safe-haven enchantment.
The surge in gold costs can also be pushed by escalating geopolitical dangers, sturdy central financial institution demand, and protracted inflation considerations. There are heightened tensions on the Russia-Ukraine entrance too. This new layer of uncertainty is complicating the trail forward for the US Fed choice on the rates of interest.
Jateen Trivedi, analysis analyst, LKP Securities, stated the rally is being supported by escalating tariff tensions, considerations over the US financial outlook and the looming US debt disaster. Continued shopping for from China, international central banks and institutional buyers has added momentum to the bullish sentiment, he stated.
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How Trump’s transfer to overtake Fed is driving up gold costs
The criticism of the US Federal Reserve by President Donald Trump has shaken the investor confidence pushing the greenback sharply decrease and catapulting safe-haven gold to a file excessive. “These are stoking considerations concerning the independence of the Fed, sending ripples by means of monetary markets. US Greenback (three-year low) and the risk-on fairness markets takes a beating whereas gold stands to learn,” stated N S Ramaswamy, head of commodities at Ventura.
Trump not too long ago stated that he can’t wait to sack Powell for not reducing greenback rates of interest even because the US-China commerce battle dangers are crushing the greenback and spiking inflation.
On Monday, the US greenback continued its slide, falling to its lowest stage since 2022, as international buyers retreat from US belongings within the face of stress between Trump and the Federal Reserve. The ICE US greenback Index which measures the buck in opposition to a basket of foreign currency, fell as little as 97.92 on Monday.
How large is the Indian gold market?
India is the second largest gold market on the earth after China. Gold demand within the nation in 2024 stood at 802.8 tonnes, as in opposition to 761 tonnes in 2023. China’s demand was 985 tonnes. The entire gold demand worth in India went up by 31 per cent at Rs 5.15 lakh crore in 2024, in comparison with Rs 3.92 lakh crore in 2023, in line with a World Gold Council (WGC) report,
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Gold holds a big place in Indian tradition, typically being gathered over generations. Throughout occasions of monetary want reminiscent of hospital bills and school charges, people are extra keen to pledge their gold holdings like jewelry to safe loans.
“The slowdown within the economic system in the previous few months would have prompted customers to pledge gold to satisfy the monetary necessities. During times of financial uncertainty like commerce wars or inflation, gold is perceived as a secure asset, prompting people to go for gold loans to satisfy instant monetary wants,” stated an analyst. The expansion of digital platforms, apps and fintech options has additionally made gold loans extra accessible and enticing, even in distant areas, contributing to their rising recognition.
As gold costs proceed to sparkle, gold loans are more likely to stay a well-liked financing choice for people throughout the nation.