Feb04, 2025: Gold prices soared by ₹400 to reach a historic high of ₹85,300 per 10 grams in Delhi, according to a report from news agency PTI, which cited data from the All India Sarafa Association. The surge in gold prices was attributed to a combination of factors, primarily the sharp depreciation of the rupee, alongside strong trends in the international gold markets. On the previous day, gold of 99.9% purity had closed at ₹84,500 per 10 grams, and it continued its upward trajectory, settling at ₹84,900 per 10 grams on Saturday.
International gold futures also experienced a significant spike, with April 2025 gold futures hitting a record high of $2,862.90 per ounce in the global market on Friday. The upward momentum in gold prices reflects a growing investor sentiment toward the precious metal as a safe-haven asset in the face of economic uncertainties.
The decline of the Indian rupee added fuel to the rise in gold prices. The rupee plunged 55 paise to close at an all-time low of 87.17 against the US dollar. This dramatic depreciation followed the announcement of tariffs imposed by the US under President Donald Trump’s administration on Canada, Mexico, and China. The imposition of these tariffs sparked concerns of a potential global trade war, which in turn created unease among investors, driving them toward safer investments like gold.
“Gold saw a positive rally on MCX as market participants increased their gold allocations, driven by fears of a potential Trade War 2.0 between the US and other countries,” said Jateen Trivedi, Vice President of Research at LKP Securities. The rising tensions in international trade, coupled with the falling rupee, created a perfect storm for higher demand for gold as a hedge against economic volatility.
On the Multi Commodity Exchange (MCX), April gold futures also surged by ₹1,127, touching a record high of ₹83,360 per 10 grams just after the Union Budget for 2025-26 was presented by Finance Minister Nirmala Sitharaman on Saturday. This was another indicator of the growing appeal of gold as an asset during times of economic and political instability.
Looking ahead, this week is pivotal for commodities, as key US economic data will be released, including reports on JOLTs job openings, ISM services, ADP employment, and non-farm payrolls. These reports are expected to provide further insight into the trajectory of bullion prices, with many market participants closely monitoring them to gauge the strength of the global economy and potential shifts in investor sentiment.
Praveen Singh, Associate VP of Fundamental Currencies and Commodities at Mirae Asset Sharekhan, noted that these upcoming macroeconomic indicators will be crucial in determining the future direction of gold prices, which have seen a significant surge due to both domestic and global economic factors.
In summary, gold prices have been bolstered by the rupee’s depreciation, the rise in international gold prices, and growing concerns over geopolitical tensions, making the yellow metal an attractive investment option in these uncertain times. With more economic data set to be released, investors will be keeping a close eye on market trends to gauge the next steps for gold and other commodities.
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