Gold reached a new high as markets were again engulfed in panic following Donald Trump’s admission that his global tariff blitz might have ‘a transition cost’. Gold trades around $ 3,207 after touching a record high of $3,218.07. Gold rate today in India is Rs 93,380.
Gold prices jumped nearly 3% to an all-time high on Thursday. Four factors are being attributed to the fresh buying interest in gold. One, a drop in the dollar value has been seen and secondly, the escalating trade war between the U.S. and China is driving investors towards the safe-haven allure of the precious metal.
Thirdly, the big bond sell-off witnessed on Tuesday is creating an environment where even US Treasuries are no longer looking safe. Lastly, the US CPI data came in lower, sparking speculation that the US Fed could now cut rates either in the May or June FOMC meeting. A lower rate regime boosts gold prices.
The Dollar Index has slipped below 100 as central banks worldwide sell US bonds and increasingly buy gold. “On Thursday, statistics indicated that underlying US inflation fell broadly in March, with traders now pricing in expectations for three interest-rate cuts in the remainder of the year, with the possibility of a fourth,” says Dr. Renisha Chainani, Head – Research at Augmont.
Also Read: Why is the gold price surging today?
According to data released Thursday, consumer prices in the United States unexpectedly declined in March, but inflation risks have shifted to the upside after Trump doubled down on China tariffs.
Fresh central bank purchases, as well as gold ETF purchases, are also supporting gold prices.
Last week, gold faced pressures as margin-driven liquidation was seen after a sell-off in the equity and bond markets. Analysts expect the gold price to move further up after this liquidation process is over.
Overall, the weakening dollar, decreasing interest rates, the US recession, the US-China trade war, and the jump in 10-year Treasury yields are all pointing to an increase in gold prices.