US President Donald Trump's tariffs policies prompted investors to seek refuge in gold.
Gold Prices Increase Amid Tariff Fears: What It Means for the Market and Investors latest news: Gold prices increased on Tuesday, February 18 as concerns over US President Donald Trump's tariffs policies prompted investors to seek refuge in gold. The threat of a global trade war has been pushing many to invest in bullion, which has resulted in increasing prices.
Spot gold rose 0.2% to $2,903.56 per ounce at 0301 GMT. US gold futures were up 0.6% at $2,916.80 per ounce. In India, 24K gold price rose by ₹10 to ₹86,630 per 10 grams in major cities such as Mumbai.
A number of important factors have push the rise in gold prices
1. Tariff Policies: President Trump has put into place a sequence of tariffs after becoming president, including a 10% tariff on Chinese goods, announced but postponed 25% tariffs on Mexican products, and a 25% tariffs date on imported steel and aluminum. These initiatives have brought unpredictability to worldwide trade, encouraging investors to head to gold as a safe bet.
2. Federal Reserve Outlook: US Federal Reserve Governor Michelle Bowman stated on February 17 that she requires greater conviction in inflation weakening before she votes for another cut in interest rates. Although increased interest rates tends to make gold less appealing because it is not-yielding, the uncertainty with trade policies remains supportive of demand for bullion.
3. Central Bank Demand: Goldman Sachs has also upped its price prediction for gold to $3,100 per ounce by 2025-end, based on rising purchases made by central banks.
Market Outlook and Demand: The uncertainty around global trade policies has also impacted the Indian gems and jewelry market. According to the Gems and Jewellery Export Promotion Council (GJEPC), India's overall gross exports of gems and jewelry fell by 7.01% in January 2025 to $2,237.14 million (₹19,302.28 crore) from $2,405.78 million (₹19,995.66 crore) in the same period last year. Imports dropped by 37.83% to $1,421.61 million (₹12,269.41 crore).
Colin Shah of MD Kama Jewelry said, "Since Trump is spearheading the tariff increase aggressively, we can see the effect on international trade. We are waiting and watching how his policies influence the market."
Rahul Kalantri, Mehta Equities' VP of Commodities, said that gold is in a narrow range with a weakening dollar index. He added, "Gold has support of $2,870-$2,855 per ounce and resistance of $2,924-$2,942 per ounce. Gold has support in India at ₹84,650-₹84,360 per 10 grams and resistance at ₹85,450-₹86,640 per 10 grams.
As the trade environment worldwide is still unpredictable because of tariffs, investors still find solace in gold, pushing prices upward. The future of gold looks positive with central bank demand and market conditions keeping it on an upward trend. Watch out for the trends in trade policies and Federal Reserve moves, as these will be important in determining the future of gold prices.
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