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Mumbai saw 24K gold at ₹87,060 and 22K at ₹79,810, according to Upstox.
Globally, spot gold remained steady at $2,929.05 per ounce as of 0303 GMT, aiming for a seventh consecutive weekly gain.
This stability comes amid concerns over a potential global trade war following US President Donald Trump’s announcement of reciprocal tariffs on countries taxing US imports.Analysts attribute the rise in gold prices to these tariff announcements, which have heightened fears of a trade war impacting major economies.
Ajay Kedia, director at Mumbai-based Kedia Commodities, noted that the market appears slightly overbought, suggesting possible technical profit-taking as prices approach the $3,000 per ounce level.Recent US economic data revealed a strong increase in the producer price index for January, following a report of the fastest consumer price rise in nearly 18 months.
These indicators suggest accelerating inflation, reinforcing expectations that the Federal Reserve will maintain current interest rates until the latter half of the year.
Traditionally, investors view gold as a hedge against inflation and economic uncertainty. However, rising interest rates can diminish its appeal as a non-yielding asset. The surge in global gold prices has also dampened jewelry sales during India’s wedding season, with dealers in China offering discounts to attract buyers.
Looking ahead, analysts expect gold prices to remain elevated throughout 2025, potentially reaching $3,000 per ounce.
Factors such as ongoing geopolitical uncertainties and aggressive trade policies are anticipated to drive demand for gold as a hedge against various economic risks.
–With Reuters inputs
First Published: Feb 14, 2025 10:24 am IS
