Gold Prices Surge Over ₹8,350 in Six Weeks: A Golden Opportunity Amid US Economic Uncertainty
Gold Price Today
Gold prices have witnessed an unprecedented rally, surging over ₹8,350 per 10 grams in just six weeks, making it one of the most lucrative assets for investors. On the Multi Commodity Exchange (MCX), gold prices settled at ₹84,900 per 10 grams, reaching a peak of ₹85,279 per 10 grams. This marks a weekly gain of over ₹2,500 per 10 grams and an overall rise of approximately 10.90% in just six weeks. In the global market, gold prices continued their upward momentum, reaching $2,886 per ounce in the spot market.
Key Triggers Behind the Gold Price Rally
1. US Economic Uncertainty and Trade War Fears
The primary catalyst behind this gold price rally has been economic uncertainty in the United States following newly inaugurated President Donald Trump’s aggressive tariff policies. Recently, Trump imposed a 10% import tariff on China and threatened a 25% tariff on Mexico and Canada—two of the largest trading partners of the US. In retaliation, China imposed countermeasures, escalating fears of a prolonged US-Sino trade war. This growing economic uncertainty has pushed investors towards gold, a traditional safe-haven asset.
2. Weakening Indian Rupee (INR)
Domestically, the Indian Rupee (INR) has been under pressure, making gold more expensive for Indian buyers. A weaker rupee tends to drive up gold prices in the domestic market, further fueling demand among investors looking for a hedge against currency depreciation.
3. Geopolitical Tensions in the Middle East
Gold prices have also gained strength due to heightened geopolitical tensions in the Middle East. President Trump’s statements regarding the Gaza Strip have increased concerns about instability in the region, pushing global investors toward gold as a risk-averse investment option.
4. Global Central Banks Cutting Interest Rates
The recent wave of interest rate cuts by major central banks has added further fuel to the gold rally:
| Central Bank | Recent Rate Cut | Current Interest Rate |
|---|---|---|
| Bank of England (BoE) | 25 basis points | 4.50% |
| European Central Bank (ECB) | 25 basis points | 2.75% |
| Bank of Canada | 25 basis points | 4.25% |
| Reserve Bank of India (RBI) | 25 basis points | 6.25% |
Lower interest rates reduce the opportunity cost of holding non-yielding assets like gold, making it more attractive to investors.
5. Weak US Employment Data
The US unemployment rate has hit its lowest since May 2024, dropping to 4% in January 2025, below market expectations of 4.10%. The US economy could add only 143,000 jobs in January, missing the forecast of 169,000 jobs. This disappointing jobs report has raised concerns about the overall strength of the US economy, increasing gold’s appeal as a safe-haven investment.
6. Rising Demand from Central Banks and Investors
The World Gold Council recently reported that global gold demand surged by 1% to a record 4,974.5 metric tons in 2024. The increase in demand has been primarily driven by central bank purchases and higher investment interest, further supporting the rise in gold prices.
Gold Price Outlook: More Upside or a Correction Ahead?
Despite the strong bullish momentum, analysts suggest that gold may face minor corrective waves in the short term.
Sugandha Sachdeva, Founder of SS WealthStreet, states:
“Given that gold prices have reached the upper end of the Bollinger Band and RSI is signaling an overbought condition, a slight pullback could occur. The first support level is at ₹83,800 per 10 grams. If breached, further declines toward ₹83,300 per 10 grams are possible.”
However, the overall long-term trend remains positive, with multiple economic and geopolitical factors supporting the gold rally.
Should You Invest in Gold Now?
For investors looking to enter the market, experts recommend buying on dips, as gold remains a robust hedge against inflation, economic uncertainty, and currency depreciation. However, investors should keep an eye on US monetary policies, geopolitical developments, and inflation trends before making major investment decisions.
Final Thoughts
Gold has surged significantly over the last six weeks, fueled by global economic uncertainty, central bank rate cuts, a weak US job market, and geopolitical risks. While some technical corrections are expected, the long-term bullish outlook remains intact. For those seeking a safe investment, gold continues to shine bright as a strong financial asset in these turbulent times.
Financial Ratios & Key Metrics
| Factor | Details |
|---|---|
| MCX Gold Rate | ₹84,900 per 10 gm |
| 6-Week Price Gain | ₹8,356 (10.90% rise) |
| Spot Gold Price | $2,886 per ounce |
| US Unemployment Rate | 4.0% (Lowest since May 2024) |
| Expected Support Levels | ₹83,800 and ₹83,300 per 10 gm |
| Global Gold Demand Growth | 1% increase (4,974.5 metric tons) |
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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.