Gold Prices Hit Record High Amid Trump’s Tariff Shock – Should Investors Buy or Book Profits
Gold Prices: On Tuesday, February 11, 2025, gold prices soared to unprecedented levels, driven by escalating concerns over U.S. President Donald Trump’s recent imposition of a 25% tariff on steel and aluminum imports. This move has intensified fears of a potential trade war and heightened inflationary pressures, prompting investors worldwide to seek refuge in the yellow metal.
Record-Breaking Surge in Gold Prices
In the Indian market, the Multi Commodity Exchange (MCX) witnessed gold futures for April 4 contracts reaching a historic high of ₹86,360 per 10 grams during the morning session. By 9:20 AM, prices slightly adjusted to ₹86,210 per 10 grams, marking a 0.46% increase from the previous close.
On the international front, spot gold climbed 0.4% to $2,917.80 per ounce, after hitting an all-time high of $2,942.70 earlier in the day. U.S. gold futures also saw a rise, trading at $2,944.10 per ounce.
Factors Fueling the Rally
The recent tariff announcement by President Trump is a significant catalyst for the surge in gold prices. By imposing a 25% tariff on steel and aluminum imports, the administration aims to bolster domestic industries. However, this move has raised concerns about potential retaliatory measures from trade partners, leading to fears of a global trade war.
Geopolitical uncertainties, combined with aggressive gold purchases by central banks, have further bolstered the metal’s appeal as a safe-haven asset. Analysts note that this is the eighth record-high for gold in 2025, underscoring the prevailing global economic apprehensions.
Analysts’ Insights
Manav Modi, Analyst of Commodity Research at Motilal Oswal Financial Services, commented, “Gold prices soared to a record high as investors flocked to the safe-haven asset after U.S. President Donald Trump imposed new 25% tariffs on steel and aluminum imports, fueling concerns over a potential trade war and inflation.”
Anuj Gupta, Head of Commodities and Currency Products at HDFC Securities, anticipates that gold prices will maintain their upward trajectory, potentially breaching the ₹87,000 mark on the MCX. He advises investors who acquired gold around Diwali 2024 to consider booking partial profits at this juncture.
Key Support and Resistance Levels
According to Manoj Kumar Jain of Prithvifinmart Commodity Research, the following support and resistance levels are observed:
| Commodity | Support Levels | Resistance Levels |
|---|---|---|
| Gold (International) | $2,914 – $2,896 per troy ounce | $2,950 – $2,974 per troy ounce |
| Silver (International) | $32.20 – $31.88 per troy ounce | $32.74 – $33.00 per troy ounce |
| Gold (MCX) | ₹85,350 – ₹84,800 per 10 grams | ₹86,200 – ₹86,650 per 10 grams |
| Silver (MCX) | ₹94,400 – ₹93,750 per kilogram | ₹96,000 – ₹96,650 per kilogram |
Investor Considerations
Investors are now turning their attention to key macroeconomic data scheduled for release this week, including the U.S. Consumer Price Index (CPI) and Producer Price Index (PPI). Weaker-than-expected figures may bolster expectations for a U.S. Federal Reserve rate cut, potentially exerting downward pressure on the dollar and further supporting gold prices.
Conversely, stronger-than-anticipated inflation data could elevate the dollar and bond yields, which might weigh on gold. Nonetheless, ongoing trade war concerns, sustained central bank purchases, and retail investor interest are expected to provide continued support for gold prices.
Financial Ratios of Key Gold-Related Investments
For investors considering exposure to gold through equities and exchange-traded funds (ETFs), here are some key financial metrics:
| Ticker | Name | Market | Price (USD) | Change (%) | Intraday High (USD) | Intraday Low (USD) | Open Price (USD) | Volume |
|---|---|---|---|---|---|---|---|---|
| GOLD | Barrick Gold Corp. | USA | 17.44 | +2.23% | 17.665 | 17.3 | 17.49 | 25,567,727 |
| GLD | SPDR Gold Shares ETF | USA | 268.37 | +1.70% | 269.9 | 267.1 | 268.0 | 13,250,312 |
| IAU | iShares Gold Trust | USA | 54.88 | +1.65% | 55.12 | 54.6 | 54.83 | 10,280,948 |
| GDX | VanEck Gold Miners ETF | USA | 41.96 | +2.77% | 42.21 | 41.56 | 41.95 | 25,509,353 |
| GDXJ | VanEck Junior Gold Miners ETF | USA | 52.10 | +2.28% | 52.63 | 51.66 | 52.47 | 5,508,628 |
Data as of February 11, 2025
Conclusion
The recent surge in gold prices underscores the metal’s enduring appeal as a safe-haven asset amid economic and geopolitical uncertainties. While the current environment presents opportunities for gains, investors should exercise caution. It is advisable to monitor upcoming economic data releases and consider booking partial profits, especially for those who have seen substantial returns since their initial investment. As always, maintaining a diversified investment portfolio remains a prudent strategy in navigating market volatility.
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Disclaimer: This blog post is for informational purposes only and should not be considered financial advice. Investors should conduct thorough research and consult with a qualified financial advisor before making any investment decisions.