Gold price hits new peak logging 6.50% weekly gain on escalating US-China trade war, weak US dollar, Fed rate cut buzz | Stock Market News
Source: Live Mint
Gold rate today: Following the escalating US-China trade war tensions and a weakening US dollar after an unexpected shift in Donald Trump’s tariff policy, gold prices climbed to a new peak in domestic and international markets. MCX gold rates settled at ₹93,887 per 10 gm after hitting a new high of ₹93,940 per 10 gm during Friday’s dealings. After ending at ₹93,887 per 10 gm levels, the MCX gold rate registered a weekly gain of ₹5,757 per 10 gm or 6.53% against the previous Friday’s close of ₹88,130 per 10 gm. In the international market, spot gold price touched a new peak of $3,245 per ounce and closed at $3,236.21 per ounce, logging a weekly gain of 6.41%.
The US dollar rates came under massive selling pressure last week, and the US dollar index slipped below 100 for the first time in the previous two years. On Friday, It finished 0.72% lower at 99.89.
According to market experts, last week’s gold price rally was driven primarily by escalating US-China trade tensions and a weakening US dollar following unexpected policy shifts. However, unexpected policy adjustments by the US, pausing tariffs on most of the trading partners, except China, triggered a significant sell-off in the US Dollar Index, which provided a strong tailwind for Gold. They said that Donald Trump’s unexpecting policy shift to pause tariffs on its trade partners except China has escalated US-China trade war tension, supporting the gold price rally. Experts said the spot gold price has decisively broken the resistance placed at $3,200, and the precious yellow metal may soon touch $3,280 and $3,320. They said the MCX gold rate might soon touch ₹95,000 to ₹95,500 per 10 gm levels in the domestic market.
Triggers for Gold Price Rally
Regarding the reasons for the gold price rally, Sugandha Sachdeva, Founder of SS WealthStreet, said, “This steep rally of last four trading sessions was driven primarily by escalating US-China trade tensions and a weakening US dollar following unexpected policy shifts. US President Trump’s imposition of hefty tariffs caused broad market disruption that also weighed on Gold. However, unexpected policy adjustments by the US, pausing tariffs on most of the trading partners, except China, triggered a significant sell-off in the US Dollar Index.” She said the US Dollar Index falling below the critical 100 mark to a multi-year low (around 99.01) provided a powerful tailwind for Gold.
Expecting further uptrend in gold prices, Jateen Trivedi, VP of Research — Commodity & Currency at LKP Securities, said, “Gold extended its record-setting rally defying rupee strength as geopolitical tensions and tariff battles between the US and China escalated further. The reciprocal tariff actions have injected fresh uncertainty into global trade flows, prompting increased hedge positions in safe-haven assets like Gold. Despite domestic currency appreciation, the robust global cues and heightened economic concerns have kept sentiment strongly bullish for bullion.”
US-China trade war in focus
Pointing towards the escalating trade war between the US and China, Sugandha Sachdeva said, “The ongoing trade conflict between the US and China further remains a central pillar supporting Gold. Both nations imposing significant tariffs (the US reportedly at 145% on certain goods, China retaliating with increases from 84% to 125% on US goods) fuels global economic uncertainty. This heightened risk environment is driving investors towards the safety of Gold. Concerns about the impact of these tariffs on global growth are a key factor pushing capital into Gold.”
US Fed rate cut buzz
Highlighting the US Fed rate cut buzz and its impact on gold prices, Sugandha Sachdeva said, “The recent US economic data, particularly consumer prices rising less than anticipated in March (both annually and month-on-month), reinforces expectations that the US Fed may have increased scope for rate cuts this year. Lower interest rates reduce the opportunity cost of holding non-yielding assets like Gold, further enhancing its attractiveness to investors.”
Gold price outlook
“With momentum in favour of buyers, Gold now eyes the resistance zone of ₹94,500 to ₹95,000, while ₹92,000 serves as an important support. Ongoing developments in the tariff dispute and investor positioning ahead of key global economic data will continue to drive price action,” said Jateen Trivedi of LKP Securities.
Predicting further upside in gold prices, Sugandha Sachdeva of SS WealthStreet said, “Gold price has decisively broken above key resistance levels, surpassing the key $3,200 per ounce level, which signals strong bullish momentum. As the next potential target area, it will likely head higher towards the $3,280 to $3,320 per ounce zone. On the domestic front, breaching the previous ₹91,500 per 10 gm resistance suggests a path towards the ₹95,000 to ₹95,500 per 10 gm zone in the near term and ₹100,000 per 10 gm in the long term. Key support is now established in the ₹91,000 to ₹89,700 per 10 gm range.”
“However, caution is warranted at these significantly higher price levels as any de-escalation of trade tensions between the US and China could reduce uncertainty and dampen safe-haven demand, or a recovery in the US dollar from its recent lows would act as a headwind for gold prices. While the path of least resistance appears higher for now, investors should remain vigilant to shifts in trade rhetoric and currency market dynamics,” Sugandha concluded.
Disclaimer: The views and recommendations provided in this analysis are those of individual analysts or broking companies, not Mint. We strongly advise investors to consult with certified experts, consider individual risk tolerance, and conduct thorough research before making investment decisions, as market conditions can change rapidly, and individual circumstances may vary.
