Gold Above Rs 91K: Before You Chase the Rally, Keep an Eye on These 3 Trends

Gold Price: With the yellow metal surging past the Rs 91,000 mark, it’s becoming harder for investors to ignore the rally. So far this year, the yellow metal has been one of the top-performing asset classes, outpacing stock market returns with a gain of over 14.7%. Several commodity analysts have already increased gold's target price for this year.

On Tuesday, gold surged another Rs 500 to hit a fresh record high of Rs 91,250 per 10 grams in New Delhi. UBS has raised its target price to $3,200, citing a worsening outlook for the US economy. "(Gold) will also benefit from a worsening outlook for the US economy, with traders now pricing in additional interest rate cuts by the Federal Reserve as concerns about a recession rise," the Swiss Bank reportedly said in a note.

Earlier this year, major financial institutions like Macquarie Group, Goldman Sachs and JPMorgan also hiked their gold price forecasts.

With geopolitical uncertainty fueled by Trump’s tariff call and major central banks ramping up gold purchases, the rally in the yellow metal is showing no signs of slowing down. Here are three key trends driving gold prices-

1. April 2 Tariff Deadline Nears

So far, the Trump administration has released no statement, on the April 2 deadline for imposing 'reciprocal tariffs' on all exports, that could provide relief to the overall sentiment. According to Citi Research analysts, Trump’s tariff move could cost India around $7 billion annually, with the auto and agriculture sectors taking the biggest hit. This has pushed investors to park their money in safe haven asset class, where gold often tops the list.

Since the start of 2024, domestic benchmark indices have remained in red, declining by around 4%. According to commodity analysts, gold has hit record highs 14 times (since President Trump took office) as trade tensions have led to growing safe-havenven demand.

2. US Strikes on Yemen

While tariff uncertainty lingers, the recent US strikes on Yemen’s Houthi group have further pushed investors towards a risk-averse stance. Gold continues its upward momentum, rising by Rs 570 to Rs 88,600 in the MCX (multi-commodity exchange) and gaining $15 to reach $3,025 in Comex, as per analysts.

"The overall sentiment remains uncertain amid heightened geopolitical tensions, with President Donald Trump vowing to persist with US strikes on Yemen’s Houthis unless their Red Sea attacks cease," said Jateen Trivedi, VP research analyst- commodity and currency, LKP Securities.

"This instability in the Middle East, coupled with China’s plans for additional economic stimulus, has further fueled safe-haven demand for gold. With these factors in play, the gold price range has shifted higher to Rs 88,000–Rs 89,200," he further added.

3. Feds Interest Rate

"New economic projections from the Federal Reserve officials will offer clarity on how the US central bankers perceive the potential effects of Trump administration policies," said Manav Modi, Senior Analyst, Commodity Research at Motilal Oswal Financial Services.

With inflation remaining sticky and lingering recession fears, any prospective rate cut could send gold demand soaring.