Gold prices in India skyrocketed by Rs 6,250 on Friday to reach a historic high of Rs 96,450 per 10 grams in the national capital, fuelled by robust demand from local jewellers and soaring global prices driven by heightened US-China trade tensions, according to the All India Sarafa Association.
Reversing a four-day decline, gold of 99.5% purity surged to Rs 96,000 per 10 grams, up from the previous close of Rs 89,750, marking its highest-ever level, as news agency PTI reported.
Gold of 99.9% purity also saw a significant jump, closing at Rs 96,450 compared to Wednesday’s Rs 90,200.
Silver too followed suit, leaping Rs 2,300 to settle at Rs 95,500 per kg from its earlier close of Rs 93,200, mirroring the bullish global momentum. Domestic bullion markets were closed on Thursday for Mahavir Jayanti.
On the futures front, gold contracts for June delivery on the Multi Commodity Exchange (MCX) spiked by Rs 1,703 to a new peak of Rs 93,736 per 10 grams.
“Gold extended its record-setting rally despite the strengthening rupee, driven by growing geopolitical uncertainty and escalating tariff conflicts between the US and China,” said Jateen Trivedi, VP Research Analyst at LKP Securities.
Global surge in gold prices
Internationally, spot gold touched a new high of USD 3,237.39 per ounce before easing slightly to USD 3,222.04. In Asian trading hours, Comex gold futures climbed to a record USD 3,249.16 per ounce, signalling strong safe-haven demand.
“Comex gold prices hit lifetime highs due to surging safe-haven demand, triggered by fears of a deepening global economic slowdown and further retaliation between the US and China,” said Kaynat Chainwala, AVP-Commodity Research at Kotak Securities.
Earlier this month, gold had already breached the USD 3,200 mark, but briefly corrected on profit-booking.
Trade war
Tensions between the US and China escalated sharply this week, with the Trump administration imposing tariffs of up to 145% on Chinese goods. In response, China slapped retaliatory duties of up to 125%, intensifying fears of a prolonged trade battle that could destabilize global markets.
The rising tensions also pressured the US dollar, which slipped below the 100-mark on the dollar index, further boosting gold’s appeal for global investors.
Long-term bullish outlook
A note by global wealth management firm UBS stated that the convergence of economic uncertainty, fears of stagflation, recession risks, and geopolitical instability will likely sustain gold’s bullish momentum. Central bank gold purchases, which have exceeded 1,000 metric tons annually for the past three years, reflect a broader trend of reserve diversification away from the US dollar.
“With the US at the epicentre of the trade war, long-term gold demand looks strong as investors seek refuge in safe-haven assets,” UBS noted.
As geopolitical and economic concerns continue to mount, analysts believe gold’s rally may still have further to go.
