After trading in a confined range for several weeks, the price of gold soared on Monday. Gold hit a nearly one-month high as geopolitical concerns and economic uncertainty fuelled investor demand for safe-haven assets.
Gold surged over 2.8%, its strongest single-day gain since May 6, as investors reacted to escalating trade and geopolitical tensions.
US President Donald Trump warned on Friday to double steel and aluminum tariffs beginning Wednesday, further straining relations with trading partners.
Simultaneously, tensions between Washington and Beijing rose when Trump claimed China violated a trade pact with the US.
Markets are now anticipating a meeting between President Trump and Chinese President Xi Jinping, after the White House confirmed the two leaders’ plans to speak later this week.
Meanwhile, Russia and Ukraine resumed their second round of direct peace negotiations on Monday, following a sharp escalation in hostilities, but made little headway toward resolving their conflict.
Spot gold trades at $3,360, its highest since the first week of May, but down by 0.65% from the previous day’s price. On Monday, US gold futures also gained 2.6%, trading at just above $3,400 an ounce in New York.
Gold price today in India is Rs 97,580, almost 2.5% lower than the peak of Rs 1 lakh reached on April 22.
Meanwhile, the US dollar continues to show weakness and has fallen about 0.6% against other currencies, making bullion less expensive to buyers. The gold index is now well below 100 and trades at around 98.90, a big slump of 9% over the last 12 months. Since March, the dollar index has lost 7% as the US government’s financial and budgetary situations appeared to deteriorate further amid a new tariff regime.
Silver prices rose over 5% to around $34.60 per ounce on Monday, approaching two-month highs as escalating global trade tensions boosted demand for safe-haven assets.
China also rejected Trump’s claims that it breached a trade agreement reached in Geneva last month, casting further doubt on the prospect of a call between Trump and Chinese President Xi Jinping.
The announcement of the tariffs coincides with a continuing court dispute concerning the legitimacy of Trump’s trade policies. An appeals court recently reinstated the tariffs, allowing the case to move forward after a federal judge had initially halted portions of them.
Investors resorted to precious metals as a hedge when concerns over global trade policy and its possible effects on the economy grew, which caused silver prices to rise in tandem with gold prices.
Dr. Renisha Chainani, Head – Research at Augmont says, “Gold prices have broken the range of $3,275(Rs 95,000) and $3,375(Rs 96,400) on the upside. If this positive momentum continues, we are likely to see the price rise towards $3,450 (Rs 99.000). Silver prices have broken the one-month range of $32.5(Rs 96,000) and $34(Rs 99,000), the next resistance is $35 (Rs 1,01,500).
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