Gold prices hit record high today: What's the reason?
What's the story
Gold prices have hit an all-time high on the Multi Commodity Exchange (MCX), driven by fears of a global trade war and a weakening US dollar. The February futures for MCX gold rose 0.47% to ₹1,46,328 per 10g around 9:20am today after hitting an all-time high of ₹1,46,567 per 10g. Silver also followed suit with March futures rising by 0.72% to ₹3,12,500 per kg after hitting its own record high of ₹3,13,896 per kg earlier today.
Global impact
International gold prices mirror domestic surge
The rise in gold prices isn't just a local phenomenon; it is being witnessed globally. US gold futures for February delivery surged almost 2% to $4,681 per ounce. The spike is largely due to geopolitical tensions after President Donald Trump threatened tariffs on eight European countries, prompting retaliatory measures from these nations and raising fears of a potential trade war between the US and Europe.
Market analysis
Expert insights on gold and silver price trends
Aksha Kamboj, Vice President of India Bullion and Jewellers Association (IBJA), said, "Gold is surging to fresh record levels as escalating trade tensions between the US and Europe intensify safe-haven demand." She added that "the sentiment is very supportive, even though the gold prices have rallied very quickly." Kamboj also noted that silver's strength amid volatility indicates strong investor conviction in the short term.
Currency impact
Dollar index's decline makes gold cheaper for overseas buyers
The dollar index fell by nearly 0.5%, making dollar-backed bullion cheaper for customers in other currencies. Manoj Kumar Jain of Prithvifinmart Commodity Research said that gold has support at $4,635 and $4,610, while resistance is at $4,700 and $4,740 per troy ounce. For silver, he said the support lies at $91.40 and $88 while resistance is at $96.60 and $98.80 per troy ounce in today's session on MCX.