Gold Prices Surge Amid US-China Trade Tensions and Weak Dollar
Gold prices in India have surged, inching closer to the psychological Rs 1 lakh per 10 grams mark in the national capital. On Monday, the price of 99.9% purity gold reached Rs 99,800 per 10 grams, reflecting an increase of Rs 1,650 compared to the previous session. The rise comes amid a weak US dollar and escalating trade tensions between the United States and China, which have driven up demand for the yellow metal. Despite a marginal dip in prices on Friday, where gold closed at Rs 98,150 per 10 grams, the overall upward trend in gold’s price trajectory for the year remains significant. Experts attribute these movements to growing geopolitical uncertainties, weakening of the US dollar, and increased safe-haven buying as investors seek stability amid global market volatility.
Highlights:
Gold price reached Rs 99,800 per 10 grams on Monday, nearing the Rs 1 lakh mark.
A significant Rs 1,650 surge in gold prices driven by weak dollar and US-China trade tensions.
Geopolitical uncertainties and economic instability contribute to higher demand for bullion.
Gold has experienced an overall rise of 26.41% per 10 grams in 2025 so far.
Significant Rise in Silver Prices and Surge in Gold Purity
In addition to the remarkable rise in gold prices, silver has also experienced a surge. Silver prices climbed by Rs 500 to reach Rs 98,500 per kg, further reflecting the heightened demand for precious metals. The rise in silver prices follows gold’s lead, with the white metal trading flat at Rs 98,000 per kg just a few days earlier. Furthermore, gold of 99.5% purity hit a fresh peak of Rs 99,300 per 10 grams, increasing by Rs 1,600. These movements mark the continued rally in precious metals, supported by various economic and political factors including trade tariffs, rate cut expectations, and the weakening dollar.
Highlights:
Silver prices surged by Rs 500, reaching Rs 98,500 per kg, aligning with the trend in gold.
Gold of 99.5% purity also surged by Rs 1,600 to hit Rs 99,300 per 10 grams.
A significant rise in both gold and silver prices reflects growing demand for safe-haven assets.
Economic and geopolitical factors continue to drive precious metal price movements.
Gold Prices Soar in 2025: A 26% Increase So Far
The yellow metal has seen a dramatic rise of Rs 20,850 per 10 grams since December 31, 2024, which represents a 26.41% increase in its value. This surge is attributed to a confluence of global factors, including uncertainties surrounding the ongoing US-China trade war, rate cut expectations by central banks, and a continued weakening of the US dollar. In particular, market participants have been reacting to the US administration’s tariff strategies, which have exacerbated global trade tensions and created an environment of economic instability. Investors have turned to gold as a hedge against potential financial market volatility, and the ongoing price rally underscores the growing role of the precious metal as a store of value.
Highlights:
Gold prices have increased by Rs 20,850, marking a 26.41% rise per 10 grams since the start of 2025.
The surge is driven by factors such as global trade tensions, weakening dollar, and geopolitical instability.
A sharp increase in demand for gold reflects its appeal as a hedge against uncertainty.
Price increase also attributed to speculative buying driven by global economic concerns.
Futures Market and International Gold Prices Hit New Peaks
Gold futures have also seen significant movement, with the price for June delivery jumping Rs 1,621, or 1.7%, on the Multi Commodity Exchange (MCX), reaching a fresh high of Rs 96,875 per 10 grams. Internationally, gold prices have surged, hitting a new peak of USD 3,397.18 per ounce. Although the prices later pared some gains, it remains evident that gold has breached significant price levels in the global market, reaching the USD 3,400 mark for the first time. The rise in futures prices is driven by an increasing appetite for safe-haven assets amid persistent global economic uncertainty, particularly surrounding trade tariffs and the broader impact of the US-China tariff war.
Highlights:
Gold futures on MCX surged Rs 1,621, marking a 1.7% rise to Rs 96,875 per 10 grams.
International gold prices broke new ground, hitting a peak of USD 3,397.18 per ounce.
Futures markets reflect strong investor confidence and growing demand for bullion.
Price surge driven by US-China trade uncertainty, weakening dollar, and global economic instability.
Bullion Prices Supported by Weak Dollar and Rising US Treasury Yields
The upward momentum in gold prices is further reinforced by the weakening of the US dollar, which recently hit a three-year low, and rising US Treasury yields. Both of these factors have created a favorable environment for gold to maintain its upward trajectory. As the dollar continues to lose ground, the appeal of gold as a store of value increases. Additionally, US President Donald Trump’s recent comments about potentially firing Federal Reserve Chair Jerome Powell have led to a rise in safe-haven buying, with investors seeking refuge in precious metals like gold. The combination of geopolitical risks and domestic uncertainties in the US has provided strong support for the ongoing gold rally.
Highlights:
US dollar weakness continues to support gold’s price increase, making it more attractive to investors.
Gold is benefiting from the US Treasury yields’ rise, coupled with Trump’s political uncertainties.
Increased safe-haven buying driven by the US dollar’s decline and political instability.
Gold is seen as a hedge against currency depreciation and economic uncertainty.
ETF Investors Fueling Gold Buying Surge
Gold’s continued rise is also being fueled by increased buying activity among Exchange-Traded Fund (ETF) investors. These institutional and retail investors have flocked to gold as a way to safeguard their portfolios against the risks posed by the ongoing trade dispute between the US and China, as well as potential shifts in monetary policy. The growing inflow of capital into gold-backed ETFs has provided additional support to the bullion market, further fueling the upward price momentum. As long as uncertainties surrounding trade tariffs and interest rate policy persist, gold is expected to continue to see strong demand, particularly from investors looking to hedge against potential losses in other asset classes.
Highlights:
Increased gold buying from ETF investors reflects rising demand from institutional players.
Investors seek to hedge portfolios against global trade tensions and shifting monetary policies.
ETF activity contributes significantly to the ongoing rally in gold prices.
Continued uncertainties surrounding tariffs and interest rates likely to sustain gold’s appeal.
Silver Follows Gold’s Lead, Rises Amid Global Uncertainty
Silver prices have also followed gold’s lead, with the spot price rising nearly 1% to USD 32.85 per ounce during Asian market hours. As with gold, silver has benefitted from increased investor interest as a safe-haven asset amidst global uncertainties. While silver’s price movement often trails gold’s, its role as a more affordable alternative to gold has made it an attractive option for investors seeking exposure to precious metals. As geopolitical tensions, trade wars, and the weakening dollar continue to create market volatility, silver is expected to maintain its upward trajectory, particularly as investors seek both short-term gains and long-term stability.
Highlights:
Spot silver prices rose 1% to USD 32.85 per ounce, aligning with the rally in gold.
Silver’s appeal as an affordable alternative to gold boosts its demand during market volatility.
Growing global uncertainty continues to support silver prices alongside gold.
As a safe-haven asset, silver is poised for further price increases.
Market Focus on Tariff Strategy and Interest Rate Direction
As the US-China tariff war continues to unfold, market participants are keenly watching President Trump’s evolving tariff strategy and its broader economic implications. Alongside this, investors are closely monitoring statements from Federal Open Market Committee (FOMC) members for any clues regarding interest rate direction. Any signals of further rate cuts or prolonged economic uncertainty could bolster gold’s appeal, maintaining its status as a go-to safe-haven asset. Analysts predict that if trade tensions escalate or interest rate easing persists, gold could continue to benefit from sustained demand, especially as a hedge against broader market risks.
Highlights:
Market closely monitors evolving US tariff strategy and its impact on global trade and markets.
FOMC commentary on interest rates seen as a crucial factor influencing gold’s appeal.
Prolonged uncertainty may keep gold demand elevated as a hedge against economic risks.
Analysts predict continued support for gold, driven by both tariff uncertainty and potential rate cuts.
