New Delhi [India], January 31 : Gold prices soared to a new all-time high of USD 2,859 per ounce (28.34 gm), marking a sharp increase of 37 per cent over the past year.
The surge comes as investors seek safe-haven assets amid economic uncertainties, particularly following a fresh decline in US Treasury bond yields and concerns over trade policies proposed by former US President Donald Trump.
Ajay Kedia, Director of Kedia Advisory stated that "Gold prices hit a historic high driven by a fresh decline in US Treasury bond yields and growing concerns over potential economic risks from former US President Donald Trump's tariff proposals. Investors are turning to gold as a safe-haven asset amid uncertainty over future trade policies."
The drop in US bond yields has made gold more attractive to investors, as lower yields reduce the opportunity cost of holding non-interest-bearing assets like gold. At the same time, Trump's recent tariff proposals have raised fears of trade disruptions, pushing investors toward the safety of precious metals.
Another key factor driving gold prices higher is the expectation of lower interest rates in the US. Trump has urged the Federal Reserve to cut interest rates, arguing that lower borrowing costs would boost economic growth. Meanwhile, easing inflationary pressures in the US have fueled speculation that the Fed might soon consider rate cuts.
Jateen Trivedi, VP Research Analyst - Commodity and Currency, LKP Securities stated "Gold traded positively with a Rs 500 gain at Rs 81,400 in MCX as participants positioned themselves against potential import duty hikes, following the 6 per cent cut in the previous Budget. A significant divergence was observed between Comex and MCX, with domestic gold rallying 2.5 per cent in the past week, while Comex gained only 0.50 per cent. In the domestic market, Rs 79,500 acts as a key support level, while Rs 82,000 serves as the next major resistance."
Gold is often seen as a hedge against inflation and economic instability. As global markets react to uncertain trade policies and shifting monetary expectations, demand for gold continues to rise. Investors are also closely watching upcoming Federal Reserve policy decisions and key economic data, which could influence the direction of gold prices in the coming months.
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