Gold shatters records: Prices surge past ₹93,000, delivering best Q1 performance since 1986

Gold prices in India hit a record ₹ 93,625 per 10 grams in Ahmedabad on Wednesday 2 April 2025. On MCX gold is trading at ₹91,229 in the opening session. International gold prices stand at $3,119 per ounce as of 10:00 AM (IST).

Manav Modi, Senior Analyst, Commodity Research at Motilal Oswal Financial services Ltd., said, "Gold price continue to advance, hovering around all-time highs, as anxious investors flocked to the safe-haven metal, bracing for announcements on U.S. reciprocal tariffs that could escalate the global trade war."

President Trump's planned levies on all trading partners, set for announcement later today have heightened fears of retaliatory measures and global economic instability. This geopolitical uncertainty, coupled with Trump's volatile stance on the Russia-Ukraine conflict, is fueling safe-haven demand for gold.

Modi said, "Suspense hangs over market as uncertainty is looming large over the details of the U.S. tariffs slated for imposition later in the day, which Trump has dubbed "Liberation Day." The White House confirmed new tariffs will be imposed, though it provided no details on the size or scope. Trump's tariff policies could ratchet up inflation, potentially putting the brakes on economic growth and escalating trade disputes."

Disappointing new U.S. jobs data and a weak manufacturing report highlight an emerging concern among Federal Reserve officials that employment could slip. "Investors are also awaiting ADP employment report due later in the day, and non-farm payrolls report on Friday that could provide insights into the Fed's future path for interest rate cuts. As market remains cautious ahead of the Liberation day announcement, Dollar index also becomes steady once again hovering ~104," said Modi.

According to Kotak Securities report, "Comex Gold April futures have surged to a record high of $3,149.5/oz for the 4th successive session, driven by escalating concerns over potential US trade tariffs.

"Notably, gold's performance in the first quarter of 2025 marked its strongest since 1986. Furthermore, gold-backed ETF holdings have experienced a significant resurgence, climbing over 6% YTD, reversing four years of net outflows. This surge, alongside increased bar and coin purchases, underscores a renewed investor appetite for gold as a hedge against macroeconomic uncertainties and portfolio diversification," per the report.

Investor demand for safe-haven assets has surged amid global uncertainties, particularly in the Middle East and Ukraine. Persistent inflation concerns and a weakening U.S. dollar have further bolstered gold’s appeal. Meanwhile, central banks, notably in China and India, are aggressively increasing their gold reserves, tightening supply and adding to the metal’s upward momentum.

Analysts anticipate sustained bullish momentum, with gold remaining a preferred hedge against economic instability. If current macroeconomic trends persist, the precious metal could continue its ascent. As gold extends its record-breaking run, investors must closely monitor global cues to assess its future trajectory.