The rejection of President Donald Trump’s tariffs by the US Supreme Court and the global trade uncertainty that arose thereafter has had a direct impact on the precious metals market. Due to rapid increase in demand for safe investments, a huge jump of up to 3 percent was recorded in the prices of gold and silver in the bullion market of the national capital on Monday. This situation clearly reflects the deepening tensions in the global economy and increasing nervousness among investors.
Record rise in prices: words of data
According to the latest data from All India Bullion Association, precious metals have touched a three-week high in the domestic market. Huge jump in silver: Silver prices witnessed a spectacular jump of Rs 8,000 (3.03 per cent), taking it to Rs 2,72,000 per kg (including all taxes) from Friday’s Rs 2,64,000. Gold also at record level: The price of gold of 99.9 percent purity has increased by Rs 3,300 (2.06 percent), and it now closed at Rs 1,62,800 per 10 grams as against Rs 1,59,500 in the previous session. International market condition: The trend is the same at the global level; Spot silver was trading up 2.2 percent ($1.79) at $86.50 an ounce and gold was up nearly 1 percent at $5,151 an ounce.
Tariff disputes and global uncertainty
The main reason for this sharp rally is the ongoing business and policy turmoil in America. According to Saumil Gandhi, Senior Analyst, Commodities, HDFC Securities, the historic decision of the US Supreme Court has led to huge volatility in various asset classes, due to which investors turned to safe assets (gold and silver). Immediately after the court’s decision, to save his trade policy, Donald Trump on Saturday announced to increase the global tariff rate from 10 percent to 15 percent. The sudden policy shift has further heightened global uncertainty, with many governments reacting cautiously and awaiting Washington’s next move.
Signs of strength even in the long term
Harish V., Head of Commodity Research, Geojit Investments Limited, says that even if the Supreme Court finds the tariffs illegal, this trade tension could put huge pressure on the US dollar, which will provide direct support to bullion. Apart from the tariff dispute, there are several fundamental factors that will keep gold prices strong in the long term. These include continued purchases of gold by central banks around the world, expectations of interest rate cuts in the US, ongoing geopolitical risks and slowing global economic growth.