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Informist, Wednesday, Apr. 16, 2025

--COMEX June gold contract hits fresh all-time high of $3,291.6 per ounce 

MUMBAI – Futures contracts of gold on COMEX rose to a fresh all-time high in early Asian trade on Wednesday due to safe-haven demand amid the ongoing global trade tensions. The trade war between the US and China and a weaker Dollar Index also supported prices of the yellow metal.  

At 0833 IST, the most-active June gold contract was up 1.4% at $3,285.8 per ounce. Earlier in the day, the contract had hit a lifetime high of $3,291.6 per ounce. 

"After recently excluding smartphones and computers from new reciprocal tariffs, President Trump indicated potential exemptions for auto parts," Dow Jones quoted DHF Capital's cheif executive officer and asset manager as saying in a note. "However, this was offset by national security investigations into pharmaceutical and semiconductor imports, raising the risk of new trade barriers."

Though the US had announced earlier that electronic goods would be exempted from the tariffs imposed on Chinese goods, it was later clarified that this would be temporary, with Trump saying that such goods were simply moving to another tariff 'bucket'. Despite the brief relief, the trade war between the US and China escalated, as the latter ordered its domestic airlines to halt deliveries of Boeing jets on Tuesday. In response, Trump called on Beijing to reach out to him to kick off negotiations aimed at resolving the escalating trade war, Bloomberg reported.

The rise in gold prices was also supported by continuous weakness of the dollar. "(This) points to a gradual erosion of the US currency's status as a safe asset — gold is likely to be an alternative for many USD investors. The recent strong inflows into the world's largest gold ETF (exchange traded fund) could also indicate this," Thu Lan Nguyen, head of FX and commodity research, Commerzbank Research, said in a note. 

At 0833 IST, the Dollar Index, which measures the strength of the greenback against a basket of six major currencies, was at 99.84, nearly 0.3% lower than its previous close. A weaker greenback makes dollar-denominated commodities such as gold cheaper for holders of other currencies. 

Given the global uncertainities, Goldman Sachs has raised its outlook for gold to $3,700 an ounce by the end of 2025, the third such hike this year, reports showed. The investment bank had in March hiked its 2025 gold price target to $3,300 per ounce.  

"The investment bank said in a note dated to Friday that it was hedging against increased risks of a US recession with gold, noting that both exchange-traded funds and physical demand for bullion had risen in recent weeks," Investing.com reported.  End

US$1 = INR 85.77

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

Reported by J. Navya Sruthi

Edited by Avishek Dutta

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