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Informist, Thursday, Apr. 3, 2025

 

--MCX June gold contract hits fresh record high of INR 91,423 per 10 gm

 

MUMBAI – Gold contracts on the Multi Commodity Exchange of India scaled a fresh lifetime high on Thursday, taking cues from COMEX, due to heightened safe-haven demand after US President Donald Trump imposed sweeping trade tariffs, sparking fear of a recession in the US and a global economic slowdown.

 

At 1224 IST, the most-active June gold contract on MCX was at INR 90,900 per 10 grams, up 0.2% from the previous close. The contract hit a fresh lifetime high of INR 91,423 per 10 grams earlier in the day.

 

Some of the US' top trading partners, such as China, the European Union and Vietnam, have been hit the hardest with substantially higher tariffs. Trump slapped 34% tariff on China, 46% levy on Vietnam, and 32% tariff on Taiwan. The new reciprocal rate on China adds to the existing tariffs totalling 20%, bringing the tariff rate on Beijing to 54%. This move has sparked concerns about the escalating trade war and its effects on the global economy.

 

"These tariffs will raise global growth concerns. There will also be uncertainty over how trading partners retaliate, which is likely to continue to support gold," analysts at ING Economics said in a report.

 

The tariff announcement has led to hope of multiple interest rate cuts by the US Federal Reserve this year, further fuelling prices of the precious metal. Lower interest rates make the non-yielding precious metal more attractive to investors. "The prospect of a weaker US economy from higher US tariffs has boosted market expectations of rate cuts by the end of the year," Dow Jones quoted Commonwealth Bank of Australia analyst Vivek Dhar as saying. Markets are now pricing in 85-90 basis points of cuts by the year-end, up from 75-80 basis points on Wednesday, he says. "Gold futures should continue to increase if further Fed fund rate cuts are priced in," Dhar says.  End

 

US$1 = INR 85.56

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

 

Reported by Ashutosh Pati

Edited by Avishek Dutta

 

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