Gold Prices Rise Amid Tariff Tensions and Rate Cut Bets

Market Performance

Gold prices witnessed a notable uptick on Thursday, August 7, as heightened trade tensions and global economic uncertainty renewed safe-haven demand.

• Spot gold was trading 0.4% higher at $3,380.76 per ounce at 0247 GMT
• US gold futures climbed 0.3% to $3,443.30 per ounce

In the Indian market, gold prices mirrored the global trend:

• 24-karat gold stood at ₹1.02 lakh per 10 grams
• 22-karat gold was priced at ₹93,810 per 10 grams

Main News

Gold prices surged following US President Donald Trump's decision to impose an extra 25% tariff on imports from India, intensifying trade tensions between the two nations. This development added fresh uncertainty to global trade dynamics, driving investors toward safer assets.

Simultaneously, a weaker dollar and growing expectations of a rate cut in the US further fueled buying interest in gold. The dollar index remained close to a one-week low following weaker-than-expected US employment data.

Market participants are also factoring in a 94% probability of a 25-basis-point rate cut by the Federal Reserve in its upcoming September meeting, as per the CME FedWatch Tool.

Company Details

There were no specific corporate announcements directly tied to the recent surge in gold prices. However, broader market sentiment and macroeconomic shifts are continuing to influence precious metal valuations.

Revenue and Financial Indicators

While this price movement isn't linked to company earnings, several macroeconomic indicators are playing a crucial role:

Dollar Index Performance

• Hovered near a 1-week low, aiding gold's upward momentum

Rate Cut Probability

• 94% chance of a rate cut in September (CME FedWatch)

US Tariff Impact

• Imposed 25% additional tariff on Indian imports

Domestic Monetary Policy

On the home front, the Reserve Bank of India opted to maintain the repo rate at 5.50%, signaling a dovish stance in its latest Monetary Policy Committee (MPC) review.

In addition:

• FY26 CPI inflation forecast was revised downward to 3.1%
• This decision further added a tailwind to gold prices in India

The RBI’s accommodative tone supports gold’s position as a strategic hedge in times of economic ambiguity.

Summary of the Article

Gold prices climbed globally and domestically due to rising geopolitical tensions and increasing expectations of monetary easing. A weaker US dollar, coupled with new tariffs and domestic policy signals, reinforced gold’s appeal as a reliable store of value.

In India, both 24K and 22K gold prices saw a noticeable rise. With the RBI maintaining current rates and lowering inflation estimates, gold has gained additional support as a protective asset during volatile periods.