Following Friday's 3% slump in Gold price on Comex, Gold price in India remains on the losing end early Monday.
The Gold price retreat from record highs extends amid a wider market sell-off as traders cover their losses and margin calls on other assets by liquidating their positions in the bullion.
Gold price is dropping to 8,330.45 Indian Rupees (INR) per gram, at the time of writing, having closed at INR 8,373.94 last Friday.
Meanwhile, Gold price dropped to INR 97,166.22 per tola from INR 97,671.99 per tola on Friday.
| Unit measure | Gold Price in INR |
|---|---|
| 1 Gram | 8,330.45 |
| 10 Grams | 83,308.23 |
| Tola | 97,166.22 |
| Troy Ounce | 259,129.50 |
Global Market Movers: Gold bulls seem reluctant to place aggressive bets
- The widening global trade war continues to fuel concerns about a global economic recession and leads to an extended sell-off in equity markets across the world. This, in turn, prompted traders to liquidate their long positions around the Gold price and raise cash to cover losses elsewhere.
- According to data released this Monday, the People’s Bank of China (PBOC) added gold to its reserves for a fifth consecutive month in March. In fact, the People's Bank of China's holding rose by 0.09 million troy ounces last month amid rising global trade and geopolitical turmoil.
- US President Donald Trump imposed reciprocal tariffs of at least 10% on all imported goods late last Wednesday, with China facing 54% levies under this new regime. In response, China’s Commerce Ministry announced on Friday that they will levy additional tariffs of 34% on all US imports.
- Meanwhile, US Commerce Secretary Howard Lutnick confirmed on Sunday that the tariffs would not be postponed and the policy would remain in place for days and weeks. Adding to this, Trump stated that there would be no deal with China unless the trade deficit is solved.
- The US Dollar struggles to capitalize on Friday's modest recovery move from a multi-month low that followed the release of the better-than-expected US Nonfarm Payrolls (NFP) report. In fact, the closely-watched jobs data showed that the economy added 228K jobs in March vs. 117K previous.
- Meanwhile, Federal Reserve (Fed) Chair Jerome Powell said that that inflation is closer to target but still slightly elevated. Powell added that Trump's tariffs could have a strong inflationary impact and that the Fed's job is to avoid temporary price hikes turning into persistent inflation.
- Investors, however, are still pricing in the possibility that the US central bank will resume its rate-cutting cycle in June and also lower borrowing costs at least four times this year. This, along with the anti-risk low, keeps the yield on the benchmark 10-year US government bond below the 4.0% mark.
- This, in turn, holds back the USD bulls from placing aggressive bets and assists the non-yielding yellow metal to stage a modest intraday bounce from a nearly four-week low touched during the Asian session on Monday. The lack of follow-through, however, warrants caution for bulls.
FXStreet calculates Gold prices in India by adapting international prices (USD/INR) to the local currency and measurement units. Prices are updated daily based on the market rates taken at the time of publication. Prices are just for reference and local rates could diverge slightly.
Gold FAQs
Gold has played a key role in human’s history as it has been widely used as a store of value and medium of exchange. Currently, apart from its shine and usage for jewelry, the precious metal is widely seen as a safe-haven asset, meaning that it is considered a good investment during turbulent times. Gold is also widely seen as a hedge against inflation and against depreciating currencies as it doesn’t rely on any specific issuer or government.
Central banks are the biggest Gold holders. In their aim to support their currencies in turbulent times, central banks tend to diversify their reserves and buy Gold to improve the perceived strength of the economy and the currency. High Gold reserves can be a source of trust for a country’s solvency. Central banks added 1,136 tonnes of Gold worth around $70 billion to their reserves in 2022, according to data from the World Gold Council. This is the highest yearly purchase since records began. Central banks from emerging economies such as China, India and Turkey are quickly increasing their Gold reserves.
Gold has an inverse correlation with the US Dollar and US Treasuries, which are both major reserve and safe-haven assets. When the Dollar depreciates, Gold tends to rise, enabling investors and central banks to diversify their assets in turbulent times. Gold is also inversely correlated with risk assets. A rally in the stock market tends to weaken Gold price, while sell-offs in riskier markets tend to favor the precious metal.
The price can move due to a wide range of factors. Geopolitical instability or fears of a deep recession can quickly make Gold price escalate due to its safe-haven status. As a yield-less asset, Gold tends to rise with lower interest rates, while higher cost of money usually weighs down on the yellow metal. Still, most moves depend on how the US Dollar (USD) behaves as the asset is priced in dollars (XAU/USD). A strong Dollar tends to keep the price of Gold controlled, whereas a weaker Dollar is likely to push Gold prices up.
(An automation tool was used in creating this post.)
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