- NEW DELHI — Gold prices jumped over 6.5 per cent this week, reaching a record
high of $3,237 per troy ounce.
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- This marks the metal's strongest weekly performance since
the early days of the Covid-19 pandemic, as global investors react to growing
economic uncertainty following a new wave of US tariffs introduced by President
Donald Trump.
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- The sharp rise in gold prices comes as traditional
safe-haven assets like US stocks and Treasury bonds are experiencing a
sell-off.
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- At the same time, the US dollar has weakened significantly,
dropping to a three-year low against the euro. These developments have made
gold more attractive to investors looking for stability.
Also read: US exemption on electronics: India has clear tariff edge over China
- Tensions escalated further on Friday when China responded to
the US tariffs by slapping a 125 per cent tariff on American imports.
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- This move has increased fears of a full-blown trade war,
which prompted investors to seek protection in gold -- a metal known to perform
well in times of economic and geopolitical stress.
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- Market analysts say that concerns over recession risks,
rising bond yields, and financial instability are driving investors towards
gold.
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- In addition to individual investors, demand from
institutions and central banks is also rising. Gold-backed exchange-traded
funds (ETFs) saw their largest inflows since 2020 in the first quarter of this
year.
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- Central banks, especially in emerging markets, are also
buying more gold as they try to reduce their reliance on the dollar.
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- In China, domestic demand has become so strong that buyers
are paying a premium over international gold prices -- a clear signal of
growing anxiety in Asian markets over financial instability.
