Gold Price today: Trump's tariff threat has pushed the price of the commodity to yet another all-time high of Rs 89,400 per 10 grams. Gold continues to beat other asset classes, including equity benchmark indices, in terms of returns being generated. So far this year, the commodity has already surged by over 12%. On the other hand, the performance of BSE Sensex and Nifty50 have dampened investor sentiment big-time by delivering a negative return of nearly 3.5%.
Many analysts bet gold will replay last year’s rally. In 2024, the yellow metal surged by over 25%, making it the best performing asset class of the year.
As of now, geopolitical uncertainty owing to the looming fear of trade wars has pushed investors to switch to gold and increase portfolio allocation towards the commodity. This is largely because gold is often considered a safe-haven asset. Whenever the global economy faces a blurry outlook, the price of gold either increases or remains relatively stable as compared to other asset classes.
Here's more to why gold is reaching all-time-high price levels-
Trump's Tariff Threat
While this is surely one of the most obvious reasons for the surge in the price of the commodity, it is worth mentioning that fears of geopolitical uncertainty might continue to push the prices even more. It is hard to ignore how and when these tariffs play out, which is also keeping investors on edge as they try to assess the complete impact of trade wars on the commodity. "Gold continued its upward momentum, gaining Rs 400 in MCX to trade at Rs 86,500, while Comex gold strengthened to $2,945. Persistent global uncertainty due to tariffs has reinforced gold’s status as a safe-haven asset, with banks and funds maintaining high allocations," said Jateen Trivedi, VP research analyst- commodity and currency at LKP Securities.
Central Banks Continue to Buy Gold
Trump's re-entry has forced central banks around the world to start accumulating more gold in their reserves. The tariff threats and its eventual impact on escalating trade wars have spiked inflation worries. Analysts are already expecting heightened volatility ahead.
As of last month, India's foreign exchange reserves reached $630.6 billion, with gold reserves playing a major role in this surge. Gold holdings reportedly increased by $1.2 billion, bringing the total to $70.88 billion.
