Gold goes wild: Hits ₹87,000 as U.S.-China trade war, supply crunch ignite frenzy for the yellow metal

Gold prices hit an all-time high on Monday, February 10, amid global uncertainties and strong investor demand. In India, gold breached the ₹87,000 per 10 grams mark. Gold prices on the MCX Monday hovered at an intraday low of ₹85,000 per 10 grams. In the international market, prices are hovering around $2,880.90 per ounce.

Manav Modi, Analyst, Commodity Research, MOFSL, said, "Gold prices rose and were on track for a sixth consecutive week of gains as escalating trade tensions between the U.S. and China prompted investors to seek refuge in the safe-haven asset. U.S. President Donald Trump this week kick-started a trade war as he followed through on his threat to impose new duties on China, though he granted Mexico and Canada a one-month reprieve."

Over the weekend Trump also announced a 25% tariff on steel and aluminium coming into the US. Amidst these updates, China also announced retaliatory measures and imposed tariffs on $14bn of worth of US goods.

Safe haven appeals for precious metals increased as all hopes for ease off in this trade war were now far away.

Modi said, "The gold market also seems to have been buoyed by both continued growth in the PBoC's gold holdings and a new Chinese program allowing insurance funds to invest in gold.  Shallow stocks in London warehouse, amidst a supply squeeze, is also boosting the sentiments significantly."

Meanwhile, a Labour Department report showed the U.S. economy added 143,000 jobs in January, compared with a rise of 170,000 expected by economists, whereas the unemployment rate stood at 4%, compared with expectations of 4.1%. Governor Powell is set to testify later this week.

Colin Shah, MD of Kama Jewelry said, "Gold prices have hit fresh highs in the international markets in today’s trading session. The yellow metal prices are seen trading at a level above $2900 mark. The key factor pushing gold prices upwards is the latest tariff threats by US President Trump that is boosting the demand for safe-haven assets like gold."

Additionally, US is also likely to impose new 25% tariffs on all steel and aluminum imports into the U.S. This latest move is on top of existing metals duties. The possibility of a likely US-China trade war are also supporting the prices of gold.

"Given the uncertainty of trade war and geopolitical tensions, we expect gold prices to touch levels of $3000 for the international markets and ₹88,000 in the domestic market respectively,” Shah added.

Amid ongoing trade disputes, gold prices could continue to rise, with experts predicting strong demand unless the Federal Reserve hints at aggressive rate cuts. In India, physical gold purchases—such as jewellery—remain popular, while investors may turn to gold ETFs and digital gold for convenient exposure to the metal.