Double whammy: Gold sinks ₹2,100 while Sensex bleeds in worst market rout since COVID

Gold prices in India plunged by ₹2,100 per 100 grams on Monday, April 7, 2025, as the stock market also faced a significant downturn. In Ahmedabad, gold is currently priced at ₹91,540 per 10 grams. Globally, the metal slipped to $3,021 per ounce as of 12:40 PM IST — its lowest since March 13 — while MCX gold closed previously at ₹88,075.

This marks the fourth straight day of decline for gold, driven by growing global uncertainty. Investor sentiment has been shaken following U.S. President Donald Trump’s imposition of tariffs worldwide, stoking fears of a prolonged trade war. As markets reel from the economic implications, concerns over a looming global recession have intensified. The sharp correction in both equities and commodities signals heightened volatility ahead.

Prithviraj Kothari, Managing Director of RiddiSiddhi Bullions Limited (RSBL), says, "Gold fell $100 from its high, after a widespread selloff in commodities and equities markets yesterday. Markets are suffering hits from all sides as US President Donald Trump imposed the worst tariffs. Trump has introduced a 10% tariff on all imports, with higher tariffs aimed at major trading partners such as China (34%), the EU (20%), and India and Japan (24%).

"Additionally, a 25% levy on foreign-made autos went into effect immediately. Trump defended his tariffs as a tactic to boost domestic manufacturing and cut trade deficits. In light of growing uncertainty under the Trump 2.0 administration, gold is probably going to be seen as a solid hedge against market volatility. Gold active June contract has important support at $3070 (~Rs 88700). Until prices are trading above this level, we are likely to see a rebound up to $3200(~Rs 91000). But if prices sustain below $3070, it can fall up to $3000 (~Rs 87000)," he said.

Gold’s surge over the past year was fuelled by economic uncertainty, rising inflation, and aggressive central bank moves. However, the recent sharp decline suggests a shift in market dynamics. According to analysts, institutional investors may be offloading gold to generate liquidity or to meet margin calls in other asset classes that are experiencing significant losses.

Manav Modi, Senior Analyst, Commodity Research at Motilal Oswal Financial Services Ltd, said, "Gold and Silver dropped more than 3% on Friday as investors sold off bullion to cover their losses from a wider market meltdown as an intensifying trade war sparked concerns of a global growth slowdown. After a blanket tariff announcement by US President Trump all markets languished, however, more than 50 nations have reached out to the White House to begin trade talks since Trump rolled out sweeping new tariffs, top officials said over the weekend as they defended levies that wiped out nearly $6 trillion in value from U.S. stocks last week."

Additionally, Anindya Banerjee, SVP: Head of Research: Currency, Commodity & Interest Rates at Kotak Securities, said, "Gold prices corrected sharply last week, primarily due to profit booking amid heightened risk aversion across financial and commodity markets triggered by Trump’s tariff measures. The exclusion of gold and silver from the proposed tariffs also removed the tariff-related premium that had been priced in earlier. Going forward, we expect gold to consolidate in the range of ₹87,000 to ₹91,500. Silver is likely to trade in a broader range of ₹84,000 to ₹96,000 over the medium term."