Gold price jumps ₹9500 in seven straight weeks on Trump’s tariff policy. A hidden reason you MUST know | Stock Market News
Source: Live Mint
Gold rate today: Following the geopolitical tension, trade war fear, and economic uncertainty caused by US President Donald Trump’s protectionist policy and weak US dollar, gold prices have been on an uptrend since the inauguration of the 47th US President on 20th December 2024. After the end of Friday’s session, gold prices registered an eighth straight weekly gain in the international market and a seventh straight weekly gain in the domestic market. In these seven weeks, MCX gold rate surged from ₹76,544 to ₹86,020 per 10 gm, logging a ₹9,506 per 10 gm gain. After ending at ₹86,020 per 10 gm mark on Friday, MCX gold registered a weekly gain of around 1.57 per cent.
In international markets, gold prices continued their upward trend, reaching a new high of $2,954.94 per ounce. Several key factors have driven gold’s sustained rise since January 2025. The tariff war initiated by the Trump administration, the recent weakness in the dollar index, geopolitical uncertainties, increased ETF inflows, and rate cuts by major central banks have all supported the yellow metal’s upward momentum. However, one factor that the majority of the experts and market observers are ignoring is the gold outflow from the Bank of England to the Central Banks across the globe, especially to the US. JPMorgan Chase and HSBC have used commercial flights to move physical gold from London to New York. According to experts, in the wake of Donald Trump imposing tariffs on gold exported to the US from the European nations, demand for gold has increased in America. This resulted in higher gold prices in the US than in Europe. So, central banks are transferring gold from the London vaults.
Gold transfer from London vaults
Pointing towards this hidden reason for the continuous rally in gold prices across bourses, Sugandha Sachdeva, Founder of SS WealthStreet, said, “The tariff dispute between the US and Europe has created uncertainties in global trade, impacting gold prices. There are concerns that the Trump administration may impose tariffs on gold following the recent 25 per cent import tariffs on aluminium and steel. This anticipation has fueled demand in the US, pushing gold prices higher. While gold prices in the US and the UK typically move in tandem, the current price disparity has led major banks to transfer gold from London vaults to New York, capitalizing on higher prices. Banks like JP Morgan and HSBC have relocated gold reserves to New York, driving up US inventories since President Trump’s election. Reports indicate that nearly 2 per cent of the Bank of England’s total gold reserves have been moved out of its vaults in recent months.”
On why central and private banks are stashing gold from Bank of England’s vaults in London, Anuj Gupta, Head — Commodity & Currency at HDFC Securities, said, “Due to the market buzz of Donald Trump imposing a tariff on gold, yellow metal prices in the US are quoting higher than the gold price quote in Europe. So, banks are trying to exploit this price differential in the yellow metal. However, looking beyond price arbitrage, there is a genuine desire for financial security due to gold’s safe-haven potential.”
RBI follows shoot
Anuj Gupta of HDFC Securities said the Reserve Bank of India (RBI) is not far behind the American Banks. He said the Indian Central Bank shipped 100 and 102 tons of gold from the Bank of England’s vaults in May and October 2024. This brought the RBI’s total gold reserves to 855 tonnes, with 510.5 tonnes stored in India.
“So, Trump’s tariff policy is not the only reason for the continuous rally in gold prices. There are geopolitical concerns, the threat of inflation spiking again, and concerns about low economic growth. Now, a new tension of gold stashing from the Bank of England’s vaults. It is a combination of these factors fueling yellow metal prices these days,” said Anuj Gupta of HDFC Securities.
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