Gold rises ₹300 to ₹88,500 per 10 gm on global uncertainty, market volatility to continue

Gold prices on Tuesday increased yet again by ₹300 to hit ₹88,500/10gm in the national capital amid firm global trends, according to the All India Sarafa Association. The yellow metal of 99.9% purity ended at ₹88,200 per 10 grams on Monday.

Gold of 99.5% purity also increased by ₹300 to ₹88,100/10gm. Silver prices jumped to ₹99,000 per kg, up ₹800 from the previous close of ₹98,200 per kg.

In futures trade on the MCX, gold contracts for April delivery jumped ₹435 to ₹85,490 per 10 grams. Silver futures for March delivery also climbed ₹439 to ₹96,019 per kg on the Multi Commodity Exchange (MCX).

"Gold continued its positive trend, driven by persistent global uncertainty over tariffs. With banks and funds maintaining high allocations to the safe-haven asset, gold remains well-supported," Jateen Trivedi, VP Research Analyst of Commodity and Currency at LKP Securities, said.

Trivedi added that major upcoming events like US President Donald Trump’s speech on Wednesday and the meeting minutes of the US Federal Reserve and the Reserve Bank of India are expected to fuel the volatile market in the coming days.

Comex gold futures for April delivery in the international markets jumped $24.94 per ounce, or 0.86%, to $2,925.64 per ounce.

"Comex is trading above $2,925 as investors continue to monitor tensions between the US and European Union, as well as developments in Ukraine peace talks," Kaynat Chainwala, AVP-Commodity Research at Kotak Securities, said.

Meanwhile, spot gold in the global markets increased by nearly $16 to $2,912.50 per ounce. Comex silver futures for March delivery in the Asian market hours were quoted 0.47% higher at $33 per ounce.

"Gold gained modestly on Tuesday, maintaining its position as the primary safe-haven asset and an appealing inflation hedge.

"However, further gains were capped due to hawkish remarks from Fed member Patrick Harker, who advocated on Monday night for the central bank to keep interest rates unchanged," Saumil Gandhi, Senior Analyst of Commodities at HDFC Securities, said.

Increasing gold demand and prices

The commerce ministry on Monday said that India’s gold imports in the month of January increased by a staggering 40.79% to $2.68 billion on increasing domestic demand for the precious metal. Gold imports in January 2024 stood at $1.9 billion, the ministry data revealed.

The total imports during April-January of the current fiscal year jumped 32% to $50 billion as compared to $37.85 billion in the year-ago period.

The ministry data added that the growth shows strong investor confidence in gold as a safe asset, while other reasons also contributed to the increase in imports including asset diversification towards gold due to global uncertainties, increasing demand from banks and a cut in customs duties.

The demand for gold, as a safe haven, increases in times of global uncertainty and market volatility. Investors rush to the precious metal when other investments including in the equity market and currencies turn risky. US tariffs, Fed rate cuts, fluctuations in the domestic equity markets and many other factors have kept the demand for gold high.