Gold prices in India hit record high amid Trump tariffs
What's the story
The price of gold has surged to record highs in India, hitting ₹1,09,691 per 10gm of 24K gold on August 8. The increase is fueled by a combination of geopolitical tensions and currency fluctuations. The rise in gold prices highlights the metal's status as a safe haven during global uncertainty. This comes as US President Donald Trump reintroduces tariffs on Indian imports and Swiss goods.
Tariff implications
India's economy at risk from Trump's tariff measures
Trump's aggressive trade policies, including a 50% tariff on Indian imports and a 39% duty on Swiss goods, have rattled global trade routes. The measures were reportedly taken over India's energy purchases from Russia. Experts believe these tariffs could hurt India's economic growth by 0.3-0.6% of its GDP and put pressure on the Indian rupee (INR), making gold more expensive in rupee terms.
Currency impact
US dollar weakness adds to gold's allure
The weakening of the US dollar has also contributed to the gold price surge. As the greenback fell nearly 0.5% to 97.96 in recent trading sessions, gold became cheaper in other currencies, making it more attractive for global investors. This trend is often seen during periods of declining confidence in fiat currencies and has historically coincided with rising bullion prices.
Trade effects
US import duties on gold bars fuel price surge
The US Customs and Border Protection agency's decision to impose import duties on one-kilo and 100-ounce gold bars has further fueled the price surge. The move disrupted expectations that such bars, especially those refined in Switzerland, would remain tariff-free. A Financial Times report revealed Switzerland exported over $61 billion worth of gold to the US in the year leading up to June 2025.
Market response
Indian gold consumption declines amid soaring prices
Despite the record-high prices, physical gold demand in India has declined. The World Gold Council's (WGC) Q2 2025 report showed a 10% year-on-year (YoY) decline in Indian gold consumption during the April-June quarter, from 149.7 tons last year to 134.9 tons this year. Jewelry demand fell by a whopping 17%, highlighting how price-sensitive Indian consumers are when it comes to gold purchases.
Information
Central banks and ETFs bolster gold demand
Institutional buying has also supported the rally, with central banks continuing to add to their reserves. Exchange-traded fund (ETF) inflows have surged in recent weeks. Meanwhile, China's quiet accumulation of gold through sustained buying by its central bank has helped stabilize market amid international uncertainty.