Ahead of US President Donald Trump’s imposition of reciprocal tariff from April 2, gold prices on Tuesday hit an all-time high as investors sought safety amid the stock-market meltdown.
In the international market, spot gold prices hit $3,148/ounce. From $2,624 at the beginning of the year, prices have so far appreciated 20% in 2025. In Mumbai’s Zaveri Bazar spot market, gold prices (99.5% purity or standard gold) have gained 20% this calendar year. On Tuesday, gold prices closed at Rs 90,750 per 10 gram, up 2% from Friday’s close of Rs 88,807.
ALSO READGold price hits a new all-time high. How high can gold go in 2025?
According to market experts, though the exact impact of Trump’s tariff threats on global trade has not been quantified, institutional investors, including central banks, are seeking the safety of gold. More importantly, there is not any clarity on how other countries will react to tariffs. For example, the European Union has already said that it has “a strong plan” for striking back at the US, “if necessary”.
“Europe has not started this confrontation,” Ursula von der Leyen, head of the European Union’s executive, said. “We do not necessarily want to retaliate, but, if it is necessary, we have a strong plan to retaliate and we will use it.”
T Gnanasekar, CEO of Commtrendz Research, a Mumbai-based commodity consultant, believes that April 2 is being seen as a crucial day with regard to reciprocal tariffs. “As a result, investors have moved to gold. If tariff decisions don’t seem to impact as badly as feared, gold could correct and unwinding of long positions could add to the speed of fall.” Gnanasekar, however, does not see a big correction because the risk of Trump’s future actions is keeping investors on their toes.
ALSO READGold ETFs Vs Physical Gold: Where to invest? 10 to 15-year returns compared
A Mumbai-based jeweller said there could be some rise in investment demand for gold because more people are beginning to believe that we are heading towards uncertain times, which make gold a perfect hedge.
Anuj Gupta, head – commodities, HDFC Securities, said: “While the broader risk has been factored in by bullion traders, and MCX’s April contract is expiring this week, traders are cautious in carrying them forward to the June contract.
» Read More
