Gold Price Outlook for India: Will Trade War Fears Drive Prices Higher?
Gold prices in India are expected to be significantly influenced by international market dynamics. Concerns over a potential "Trade War 2.0," triggered by recent tariff actions, are likely to drive safe-haven demand for gold. Let's examine the potential impact on 24K, 22K, and 18K gold prices today, February 4, 2025.
International Influences
After a bearish start on Monday, spot gold surged to reach a new record high, while MCX gold prices also rebounded to close near their all-time high. These movements reflect heightened global uncertainty, primarily due to trade tensions.
Expert Analysis
Jateen Trivedi, VP Research Analyst - Commodity and Currency at LKP Securities, noted that market participants have increased their gold allocations due to concerns about a potential Trade War 2.0 from the US. He pointed out that Trump's aggressive tariff policies, including a 25% tariff on Canada and Mexico and a 10% tariff on China, have fueled a stronger dollar rally. Additionally, Trump has issued a warning to BRICS nations against de-dollarization, escalating trade tensions and signaling the possibility of 100% tariffs on BRICS nations if they pursue alternatives to the dollar.
Trivedi added, "The uncertainty surrounding global trade imbalances has fueled continued gold buying. The next target is Rs 83,000, with support at Rs 81,500."
Gold Prices in India
On February 3, following the Union Budget 2025, gold prices experienced a notable drop:
- 24K Gold (100 grams): Decreased by Rs 4,400 to Rs 8,40,500
- 24K Gold (10 grams): Decreased by Rs 440 to Rs 84,050
- 22K Gold (100 grams): Decreased by Rs 4,000 to Rs 7,70,500
- 22K Gold (10 grams): Decreased by Rs 400 to Rs 77,050
- 18K Gold (100 grams): Decreased by Rs 3,300 to Rs 6,30,400
- 18K Gold (10 grams): Decreased by Rs 330 to Rs 63,040
Silver Prices in India
In contrast to gold, silver prices remained unchanged at Rs 99,500 per 1kg. However, in cities like Hyderabad, Chennai, and Kerala, silver prices stood higher at Rs 1,07,000 per 1kg.
MCX Gold and Silver Prices
On the Multi Commodity Exchange (MCX):
- MCX Gold (April 2025 expiry): Ended at Rs 83,218 per 10 grams, up by Rs 914 or 1.11%
- MCX Silver (1 kg): Stood at Rs 94,350, higher by Rs 1,136 or 1.22%
Spot Gold Prices
After a bearish start, spot gold prices rose to hit a new record high of $2,820 per ounce on February 3.
Summary and Outlook
Gold prices are expected to rise due to international market influences, especially trade war fears. Investors are likely to seek the safety of gold if geopolitical tensions and economic uncertainty remain high. Key levels to watch are Rs 83,000 (target) and Rs 81,500 (support).
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