Gold prices have made surprising strides as investors are flocking to safe-haven assets, as concerns over the trade war between Washington and Beijing deepen.
Global and Indian prices have breached every record, as international uncertainty, economic slowdown fears and US-China tariff tensions continue to shake markets.
On April 11, global gold prices climbed above $3,200 per ounce for the first time ever, touching $3,219 during intraday trading. This comes amid a notable drop in the value of the dollar, as investors shift their money to safer assets.
Kerala mirrored the global jump. The price of gold rose by ₹185 per gram, pushing it to ₹8,745. That means one sovereign (8 grams) of gold now costs ₹69,960. Compared to just three days ago, that’s an increase of ₹4,140.
The biggest single-day surge came on April 10, when the price spiked ₹270 per gram and ₹2,160 per sovereign — a rare and steep climb.
Prices for 18-carat gold also rose ₹150 to reach ₹7,200 per gram. Silver, on the other hand, has stayed put at ₹105 per gram.
There’s no one answer, but a few things seem to be in play.
Globally, there’s rising demand for gold from central banks. At the same time, many investors believe the US Federal Reserve might start cutting interest rates as early as June — possibly by as much as 1% over the rest of the year. That would make gold more attractive than other assets.
Add to that the tensions in the Middle East and parts of Europe, and you’ve got a recipe for market nervousness. When things look shaky, investors tend to park their money in what they see as safe bets — and gold has always been one of those.
Exchange-traded funds (ETFs) that are backed by physical gold have also seen a flood of money in recent months, further boosting demand.
The former US president, now back in the spotlight, has re-escalated trade tensions with China. While most countries, including India, have been given a temporary reprieve from retaliatory tariffs until July 9, China hasn’t been as lucky.
Goods from China are now facing a 145% tariff as per the latest announcements. China has hit back with tariffs of up to 84% on US imports. There’s also speculation that China may consider offloading US treasury bonds — it holds the second largest stockpile after Japan. If that happens, it could send shockwaves through the US economy.
The dollar has taken a hit. Since the recent tariff announcements, it’s dropped by around 2%. Compared to when Trump first took office, it’s down 7%.
Investors are moving away from the greenback and putting their money into traditionally stable currencies like the Swiss franc, euro, and Japanese yen.
To buy a sovereign of jewellery, you’ll have to factor in more than just the gold rate. Making charges (usually at least 5%), GST (3% on both the gold and the labour), a ₹45 hallmarking fee, and an 18% tax on that fee will all be added. In total, that can push the cost to around ₹75,000 — and that’s for standard designs.
Custom pieces can cost even more, depending on the intricacy.
