Escalating tensions in the US-China trade relationship are bolstering demand for gold in India, despite a global stock market rebound following a temporary tariff reprieve announced by US President Donald Trump. Gold prices are also demonstrating resilience amidst ongoing Chinese disinflation, driven by market apprehension regarding US-Sino trade disputes and anticipation of the forthcoming US Consumer Price Index (CPI) data.
As of this writing, gold is trading at 8,668.09 Indian Rupees (INR) per gram, an increase from Wednesday’s closing price of INR 8,550.30, according to FXStreet data. The price of gold has risen significantly to INR 101,094.90 per tola, up from INR 99,728.98 per tola the previous day.
[Table of Gold Prices in INR removed for brevity and conciseness]
The continued escalation of the US-China trade war is providing substantial support to gold prices. Despite President Trump’s announcement of a 90-day pause on tariffs for most nations, the imposition of increased tariffs on Chinese goods following China’s declaration of additional tariffs on US imports has heightened investor concerns. The potential for a full-scale trade war between the world’s two largest economies is fueling fears of inflation and hindered global economic growth, thereby increasing the appeal of gold as a safe-haven asset.
This momentum remains largely unaffected by the recovery in equity markets. Recent Federal Reserve (Fed) communications, including the March FOMC meeting minutes, indicate a cautious approach to interest rate cuts due to concerns about potential inflationary pressures. Several Fed policymakers have advocated for a measured response, with some suggesting that tariffs could contribute to inflation.
Consequently, market expectations for aggressive rate cuts by the Federal Reserve have been tempered, with traders now anticipating a potential resumption of rate cuts in June and a total of 75 basis points of reductions throughout the year. This shift in expectations has had limited impact on the US Dollar or the demand for gold.
Investors are now awaiting the release of US consumer inflation figures, followed by the US Producer Price Index (PPI) on Friday, for further insights into the Fed’s monetary policy trajectory. These data releases are expected to significantly influence near-term USD dynamics and provide directional impetus to the XAU/USD pair.
FXStreet calculates gold prices in India by converting international prices (USD/INR) to the local currency and measurement units. Prices are updated daily based on market rates at the time of publication and are intended for reference purposes only, as local rates may vary slightly.
