Adding fuel to the rally were remarks by US Treasury Secretary Scott Bessent, who termed the ongoing tariffs between the US and China as “unsustainable.” His statement hinted at the possibility of reduced trade barriers, although former President Donald Trump has not confirmed any such policy changes.

These remarks are significant as they influence investor expectations around future trade relations, potentially reducing economic uncertainty. A more stable global economy typically dampens gold demand, but when comments such as Bessent’s introduce uncertainty, gold sees inflows as a hedge.

Dollar’s Slide Adds to Gold’s Appeal

A weaker dollar has always been a positive for gold. As the greenback slipped by 0.3%, it made gold more affordable in other currencies, increasing international demand.

This inverse relationship between the US dollar and gold prices is crucial for global investors, as fluctuations in the dollar often directly affect commodity prices, especially for non-yielding assets like gold.

Gold's Traditional Role as a Safe Haven

Historically, gold has been a safe-haven asset, attracting investors during times of global economic and political stress. It holds intrinsic value and is not tied to any government’s creditworthiness, making it a favoured investment during crises.

Despite its non-yielding nature, gold remains popular during uncertain times, as it provides capital preservation and hedges against inflation and currency devaluation.

Technical Factors & Market Psychology

Another reason for Thursday’s jump is related to technical trading levels. When gold broke below $3,300, it triggered technical buy signals, prompting short-term traders and institutional buyers to enter the market. This surge in demand further fuelled the rise.

Investors also responded positively to market psychology, where fears of missing out (FOMO) on another rally encouraged buying.

Domestic Gold Price Trends

In India, gold is a culturally and financially significant commodity. With prices touching ₹98,240 per 10 grams for 24K, interest among both retail and institutional investors is expected to stay strong. The rise in domestic prices reflects not only international movements but also import duties, currency fluctuations, and seasonal demand.

With the wedding and festival season ongoing, physical demand for gold in India could lend additional support to prices.

Global Trade Tensions Still Loom

Though Bessent’s comments were seen as optimistic, trade tensions between the world’s two largest economies remain unresolved. The uncertainty surrounding future trade relations continues to support risk-averse strategies, including investments in gold.

The trade war has historically been a driver for gold rallies, as tariffs disrupt markets and threaten economic growth, leading to portfolio diversification into precious metals.

Outlook: Bullish but Volatile

While the short-term outlook for gold remains volatile, analysts maintain a bullish long-term view due to:

• Continued central bank buying across countries

• Elevated levels of macro uncertainty

• Persistent inflation concerns

• Weakening dollar and currency volatility

• Increased portfolio allocations to gold by institutional investors

However, traders are advised to exercise caution due to the sharp swings seen in recent sessions. Gold’s tendency to react quickly to global headlines means investors must remain updated and alert.

Investment Strategy Ahead

Given the current landscape, experts recommend the following strategies:

• Staggered Buying: Instead of bulk investments, consider periodic purchases to average out costs during volatile periods.

• Diversification: Use gold as part of a broader asset allocation strategy, balancing with equities, debt, and other commodities.

• Track Global Cues: Monitor the US dollar, geopolitical developments, and central bank policies for clues on future gold price direction.

Conclusion

Gold’s rebound on April 24 is a classic reminder of how swiftly market dynamics can change. From a dip below $3,300 to a sharp climb past $3,335 in a single day, gold has once again proven its role as a reliable store of value during uncertain times.

Investors—both in India and globally—should continue to view gold as a core component of long-term portfolios, especially in an environment fraught with trade tensions, inflation worries, and currency volatility.

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