When markets were once again rocked by panic after Donald Trump acknowledged that his global tariff blitz might have “a transition cost,” gold hit a new high. After reaching a record high of $3,218.07, gold is currently trading at about $3,207. The current price of gold in India is Rs 93,380.
On Thursday, gold prices surged by about 3% to reach a record high. The renewed interest in purchasing gold is being ascribed to four factors. First, there has been a decline in the value of the dollar, and second, investors are drawn to the precious metal’s safe-haven appeal as a result of the growing trade conflict between the United States and China.
Thirdly, even US Treasuries are no longer appearing safe due to the massive bond sell-off that took place on Tuesday. Last but not least, a decline in the US CPI data raised the possibility that the US Fed will now drop rates at the FOMC meeting in May or June. Gold prices rise in a reduced rate system.
Consumer prices in the United States unexpectedly fell in March, according to statistics released Thursday. However, since Trump doubled down on tariffs on China, inflation risks have turned to the upside. Gold prices are also being supported by recent central bank purchases and gold ETF purchases.
A sell-off in the bond and equity markets last week resulted in margin-driven liquidation, which put pressure on gold. Following the conclusion of this liquidation process, analysts anticipate that the price of gold will continue to rise.
All things considered, the US recession, the US-China trade war, the declining interest rates, the dollar’s depreciation, and the increase in 10-year Treasury yields are all suggesting that gold prices will rise.
