Gold Prices Shatter Records at $3,300/oz, Near Rs 1 Lakh Mark in India Amid Trade War

Gold Surges to Historic $3,300 Per Ounce, Approaches Rs 1 Lakh Mark in India

April 17, 2025 - Gold prices have shattered previous records, soaring past the $3,300 per ounce milestone in international markets on Wednesday amid escalating US-China trade tensions. The precious metal reached an unprecedented high of $3,318 per ounce, pushing domestic prices to the brink of the psychological Rs 1 lakh per 10 grams barrier.

Record-Breaking Surge Across Markets

The intensification of the tariff war between the United States and China has triggered a dramatic flight to safe-haven assets, propelling gold to historic levels in both international and domestic markets.

• In Delhi, gold surpassed the Rs 98,000 mark, trading at Rs 98,100 by Wednesday evening
• On the Multi Commodity Exchange (MCX), gold futures for June delivery reached an all-time high of Rs 95,435
• International spot prices climbed to $3,318 per ounce, setting a new global benchmark

"Gold rose to a new record high, surpassing the previous all-time peak set on Monday. Traders were whip-lashed again by a slew of tariff headlines; in the latest, US President Donald Trump ordered a probe into critical minerals, sparking a move toward safe haven assets," said Saumil Gandhi of HDFC Securities.

Unprecedented Price Velocity

What makes this rally particularly remarkable is the speed at which prices have climbed. Since April 8, when gold was trading at $2,982 per ounce, prices have surged by $336 per ounce – representing an extraordinary 11% increase in just eight days.

Industry experts describe this as the fastest rise in gold prices over an eight-day period, confirming what many are calling a "parabolic movement" in the precious metal's valuation.

Impact on Consumer Behavior and Market Dynamics

The skyrocketing prices have significantly altered consumer behavior in the gold market. Avinash Gupta, Vice-Chairman of the All India Gem & Jewellery Domestic Council, noted that the steep price rise has dampened consumer appetite for gold.

"Because of this steep price rise, gold is selling at a discounted price of 1-2% of the actual landing cost in India," Gupta explained.

This unusual market dynamic has created a situation where gold is trading at a discount to import prices in local markets – a clear indication of suppressed retail demand despite the bullish trend.

Surendra Mehta, National Secretary of the India Bullion and Jewellers' Association, highlighted an unprecedented phenomenon: more consumers are visiting jewelers to sell or exchange old gold than to make new purchases.

Profit-Booking and Portfolio Rebalancing

Market analysts suggest that the current price surge may be creating opportunities for strategic profit-booking, particularly for investors facing losses in other asset classes.

"Whenever prices go up so drastically, consumer sentiments do take a beating, impacting retail sales. But in this case I suspect those who have run up losses on the stock markets may be booking profits in gold to offset their losses," observed Gupta.

This trend points to gold fulfilling its traditional role as a portfolio hedge during periods of market volatility and economic uncertainty.

Silver Lags Behind in the Precious Metals Rally

While gold has captured headlines with its record-breaking performance, silver has failed to match its pace. On Wednesday, international spot prices for silver stood at $32.8 per ounce, with domestic prices crossing the Rs 1 lakh per kilogram mark in Delhi spot markets.

Industry experts attribute silver's relatively subdued performance to its stronger ties to industrial demand, which is currently under pressure from recession fears sparked by the ongoing trade tensions.

"The demand for silver is primarily driven by industrial demand but the tariff wars are threatening to spark off a recession. If these trade wars settle down, silver is the only metal that will rise at a quick pace," Gupta explained.

Outlook Remains Bullish

Despite the extraordinary gains already realized, market experts anticipate that gold's bullish momentum may continue in the near term. The combination of geopolitical tensions, trade uncertainties, and the metal's traditional appeal as a safe haven during turbulent times continues to drive investor interest.

As international relations remain strained and market volatility persists, gold appears positioned to maintain its upward trajectory, potentially breaking through additional price milestones in the coming weeks.

Disclaimer: The views and investment tips expressed in this article are for informational purposes only and do not represent financial advice. The views expressed are those of the sources cited and not necessarily those of this website or its management. Investing in equities or other financial instruments carries the risk of financial loss. Readers must exercise due caution and conduct their own research before making any investment decisions. We are not liable for any losses incurred as a result of decisions made based on this article. Please consult a qualified financial advisor before making any investment.

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Federal Reserve Chair Warns: Trump Tariffs Will Drive Higher Inflation and Economic Uncertainty

Federal Reserve Chair Warns of "Higher Inflation" as Trump Tariffs Create Economic Uncertainty

April 17, 2025 - US Federal Reserve Chair Jerome Powell has issued a stark warning about the economic consequences of President Donald Trump's expanding global trade war, stating that the central bank now finds itself in "uncharted waters" as it navigates the fallout from these sweeping policy changes.

Central Bank Faces Unprecedented Challenges

Speaking at an economic forum in Chicago on Wednesday, Powell emphasized that the scale of tariff increases implemented by the Trump administration has been "significantly larger than anticipated" and warned that the ongoing uncertainty surrounding these trade policies could inflict lasting damage on the US economy.

"These are very fundamental policy changes...There isn't a modern experience of how to think about this," Powell remarked, highlighting the unprecedented nature of the situation facing America's central bank.

The Federal Reserve operates under a dual mandate to promote maximum employment and maintain price stability. According to Powell, Trump's aggressive tariff strategy now threatens both these core objectives.

Inflation Concerns Mount

While acknowledging that the US economy remains in "decent shape" based on recent data, Powell delivered a clear warning about inflationary pressures: "Inflation is likely to go up as tariffs find their way and some part of those tariffs come to be paid by the public."

This frank assessment confirms what many economists have been predicting - that American consumers will ultimately bear a significant portion of the costs associated with the administration's tariff policies.

Powell also noted the "volatility" in financial markets during this "time of high uncertainty," signaling that the central bank is closely monitoring the situation as it evolves.

Markets React with Sharp Declines

The market volatility referenced by Powell was readily apparent on Wall Street, where major indices experienced significant declines:

• The Nasdaq plummeted more than 4% at one point
• The S&P 500 fell more than 3%
• The Dow Jones Industrial Average dropped more than 2%

Technology stocks were particularly hard hit, with semiconductor giant Nvidia experiencing a momentary drop exceeding 10% after disclosing substantial costs related to new US export restrictions on semiconductors. These restrictions form part of Trump's broader trade confrontation with China.

Trump's Trade Strategy and Global Response

Despite the economic warnings and market turbulence, President Trump has maintained an optimistic stance on his trade policies. On Wednesday, he posted on social media about "Big Progress!" in trade negotiations with Japan.

The president's strategy involves using tariffs as leverage to secure bilateral trade agreements that he believes will ultimately lower barriers to US products and shift global manufacturing operations to American soil.

However, this approach has led to particularly tense relations with China, which now faces tariffs of up to 145% on many products, significantly higher than the blanket 10% tariff imposed on most other countries. Beijing has responded with retaliatory duties of 125% on US goods.

China's Response and Economic Performance

Chinese Foreign Ministry spokesman Lin Jian responded to the escalating trade tensions with a clear message: "If the US really wants to resolve the issue through dialogue and negotiation, it should stop exerting extreme pressure, stop threatening and blackmailing, and talk to China on the basis of equality, respect and mutual benefit."

"There is no winner in a tariff war or a trade war," Lin added. "China does not want to fight, but it is not afraid to fight."

Despite the trade tensions, China reported a forecast-beating 5.4% increase in economic growth for the first quarter of 2025, attributed partly to exporters rushing to ship goods before the implementation of US tariffs.

Economic Outlook Amid Trade Uncertainty

Powell's warnings highlight the complex economic landscape now facing the Federal Reserve as it attempts to fulfill its mandate in an environment of heightened trade tensions and policy uncertainty.

While the immediate impacts of tariffs on inflation and economic growth are beginning to materialize, the longer-term consequences remain difficult to predict. The Federal Reserve will likely need to balance these inflationary pressures against signs of economic slowdown as it formulates monetary policy in the coming months.

For investors and businesses, Powell's remarks underscore the importance of closely monitoring developments in both trade negotiations and Federal Reserve policy as key indicators of future economic conditions.

Disclaimer: The views and investment tips expressed in this article are for informational purposes only and do not represent financial advice. The views expressed are those of the sources cited and not necessarily those of this website or its management. Investing in equities or other financial instruments carries the risk of financial loss. Readers must exercise due caution and conduct their own research before making any investment decisions. We are not liable for any losses incurred as a result of decisions made based on this article. Please consult a qualified financial advisor before making any investment.

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