Gold hit another record high on Thursday as the precious metal extended a multi-month rally. On Thursday, Gold trades around $3,128 but has retreated after hitting an intraday high of $3,167. Over the last year, gold has been up 38%. In India, the gold price today is Rs 90,000 and is slowly inching towards the Rs 1 lakh mark.
But the lack of a significant spike in gold price following tariff announcements could be a telling sign. On technical levels, the Relative Strength Index is already above 70, indicating overbought territory. Any further rise in gold price could see pressure selling when RSI reaches 80. “Until the Gold June contract sustains above $3,145 (Rs 91,000), it is expected to continue its uptrend for the next psychological resistance of $3,200 (Rs 92,000) and $3,250 (Rs 93,500),” says Dr. Renisha Chainani, Head – Research at Augmont.
With Trump imposing high tariffs, the talks of higher inflation, stagflation, and recession have started doing the rounds. In such an uncertain environment, gold remains the safest bet and is a safe-haven asset for everyone.
Gold has surged about 20% in Q1 2025 and is all set to reach higher levels until certainty prevails in the economic environment. The big uncertainty is around the Trump administration’s unpredictable tariff policy, which some analysts caution could reignite inflation and slow economic growth.
“The US imports a lot of goods and commodities from Asia, which will invariably become more expensive now. Therefore, there remains a catch on the Trump administration’s objective of bringing in more dollars to check their debt, as the prices of the same goods, now expensive, may cause inflation in the US and further slow down the economy,” says Dr. Saurabh Gadgil, CMD, PNG Jewellers.
“Fears of a US recession and a slowing global economy are fueling a rush for gold, which might propel the commodity even higher. Markets are now pricing in 85 to 90 basis points of rate cuts by the end of the year, up from 75 to 80 basis points on Wednesday,” says Dr. Chainani.
When the interest rate falls, gold rises. With the US Fed expected to cut rates aggressively now, gold may continue to shine. However, as gold trades at multi-year highs, any profit booking at news-led events should not be ignored.
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