Gold prices in India surged to an all-time high on Friday, March 28, as both domestic and global factors fueled investor demand for the precious metal. The price of 24-carat gold jumped to ₹90,980 per 10 grams, marking a sharp increase of ₹1,140 per 10 grams. Meanwhile, 22-carat gold prices climbed to ₹83,400 per 10 grams, reflecting a ₹1,050 rise.

Gold Prices Surge Past $3,000 Globally

This record-breaking rally aligns with global trends, where spot gold prices soared to an all-time high of $3,079.01 per ounce, while US gold futures surged to $3,086.80 per ounce. The sharp rise has been driven by economic uncertainties, geopolitical tensions, and growing investor interest in safe-haven assets.

Kyle Rodda, a financial market analyst at Capital.com, noted that gold is currently benefiting from factors such as US trade policy, fiscal policy, geopolitical risks, and economic slowdown concerns. With US President Donald Trump proposing fresh tariffs, investors are growing increasingly cautious about the potential impact on global trade.

US Tariffs and Global Economic Uncertainty Drive Gold Demand

The possibility of an intensified global trade war has heightened demand for gold. The uncertainty over retaliatory measures from countries like Canada and China is further pushing investors towards gold as a hedge against economic instability. Edward Meir, an analyst at Marex, stated, "Markets are yet to understand the full extent of retaliatory responses, which adds to economic concerns."

Canadian Prime Minister Mark Carney hinted at countermeasures in response to Trump’s proposed auto tariffs, further exacerbating the situation.

Gold Prices in India Surge as RBI Boosts Reserves

The Reserve Bank of India (RBI) has also been a key driver of gold price increases, having added 32.63 tonnes of gold to its reserves in the first half of FY25. This brings India's total gold reserves to 854.73 tonnes, showcasing a strong demand from central banks.

Colin Shah, MD of Kama Jewelry, highlighted that gold has been one of the best-performing assets in FY25, with global prices rising by 15.4% and domestic prices up by 14%. This marks one of the strongest performances for gold in over a decade.

Interest Rate Expectations and Inflation Concerns Strengthen Gold’s Appeal

Another major factor driving gold’s rally is expectations of interest rate cuts by the US Federal Reserve. Lower interest rates make gold a more attractive investment option, as it does not yield interest like bonds or fixed deposits.

Additionally, inflation concerns and geopolitical tensions in Europe and the Middle East continue to push investors towards gold as a store of value.

What’s Next for Gold Prices?

With gold breaching the $3,000 per ounce mark, analysts believe the next major resistance level will be $3,100 per ounce.

The market is now closely watching US personal consumption expenditures (PCE) data, which could influence short-term price movements. If inflation data remains high, it could further bolster gold’s position as a hedge against rising prices.

Conclusion

The ongoing trade war tensions, central bank purchases, and interest rate expectations are keeping gold prices elevated. With investors flocking to safe-haven assets, gold’s rally may continue in the coming months.

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