NewDelhi: Fears of a recession are rising in the United States, the world’s biggest economy — even President Donald Trump has conceded it. Trump blames Fed Chair Jerome Powell, and he calls for rate cuts, or the US will go into a recession — over a statement today — story by Foreign Affairs Analysis Team. After tarry, this severely would never be the case over a till after Fed indicated it does rush to declines. These comments from Trump have provided further impetus to the ongoing rally in gold prices, which are at unprecedented highs.
Demand for gold is on the rise in both the US and India. Gold is priced close to a record high of $3,500 an ounce in the US, while in the Indian futures market, the gold price is up by more than 1,900 rupees. In India, the climb in gold price is so overwhelming that it is going to cross the 1 lakh rupee in a few hours.
Gold rates in the Indian Multi Commodity Exchange (MCX) have increased by 1,900 rupees in a single session. Gold advanced ₹1,557 to ₹98,836 per 10 grams as of 9:35 a.m. During the day, the price hit an all-time peak of ₹ 99,178 per 10 grams. Gold was priced at ₹97,279 a day ago. In less than a month, gold prices have increased by ₹8,461, from ₹90,717 per 10 grams at the end of March to ₹99,178 today. This spike means that investors are up more than 9% for the month of April only.
The recent rapid rally in gold can be partially attributed to Trump’s comments on possible recession, continuing trade tensions and economic uncertainty. Gold prices in the Delhi bullion market on Monday crossed the 1 lakh rupee mark. Considering the current trend, gold may break through this mark during the session of the day.
CUSA is also seeing a bonanza in the gold market in the US. Gold traded above $3,500/oz on the COMEX market in New York for the first time ever. Gold is currently trading at $3,496.60/ounce, up more than $71. The price of gold at COMEX has jumped 11.23% ($353.82) just in April.
Meanwhile, in the US spot market, gold prices have also jumped. Gold spot prices are up $56 per ounce at $3,480.50 as of Tuesday. Gold spot prices peaked at a record $3,494.84 per ounce. That’s a gain of almost 12% in just this month of April, or $371.79 an oz.
Gold, a traditional “safe haven” during economic uncertainty, has rallied over 30 this year. Only last Wednesday, bullion headed past the $3,300 an ounce mark, before pricing just a few days later pushed even higher.
It is clearly reflected in the markets that Trump is talking about the need for immediate interest rate cuts to avoid a recession. Also, the increasing trade row with the US is stoking investor fears, as China has accused Washington of “tariff abuse.” The language of trade war has hardened, and nations are being warned not to ink any sweeping economic deals with the United States.
A handful of Federal Reserve officials will be giving speeches later this week, and markets are hoping for more guidance on future monetary policy in a world increasingly suspicious of the central bank’s independence.
With the global economy in disarray, investors are pouring into gold as a stable hedge from destabilisation, and the price of gold reflects that this trend may continue moving forward.