The gold price has soared to record levels on Thursday in both global and local markets. In the international market, gold per ounce jumped $27, reaching $2,942. Meanwhile, in the local market, the price of gold per tola rose by Rs 2,800, hitting a new peak of Rs 309,300. Similarly, gold per 10 grams increased by Rs 2,400, reaching Rs 265,174.
Why Are Gold Prices Rising?
Gold prices are climbing due to rising demand for safe-haven assets. Economic uncertainty, driven by trade policies and inflation concerns, is pushing investors toward gold. The US inflation report has reinforced expectations of a Federal Reserve rate cut, further boosting gold’s appeal.
Spot gold traded near its all-time high on Thursday, gaining 0.3% to $2,940.99 per ounce. Just weeks ago, on February 24, it hit a record $2,956.15 amid economic worries.
Impact of US Trade Policies
The fluctuating trade policies of the US government are playing a major role in market volatility. Tariffs on China, along with shifting policies on Canada and Mexico, have shaken financial markets. In response, China and Canada have imposed retaliatory tariffs, adding to global uncertainty.
Macquarie Bank has raised its gold price forecast to $3,150 per ounce for the third quarter. Analysts predict gold could hit $3,500 this year as economic conditions remain uncertain.
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Interest Rate Cuts and Gold Demand
Recent data shows US consumer prices cooling, leading investors to believe that the Federal Reserve may lower interest rates. A low-interest rate environment makes gold more attractive, as it does not yield interest like bonds or savings accounts.
Last year, the Fed cut interest rates by 100 basis points, but it has held rates steady since then. Investors now await the US Producer Price Index (PPI) data, which could provide further insights into the Fed’s monetary policy direction.
Other Precious Metals See Mixed Trends
While gold prices continue to climb, other precious metals are showing mixed trends.
- Silver fell 0.6% to $33.03 per ounce.
- Platinum declined 1.2% to $972.70.
- Palladium dropped 0.5% to $944.07.
Despite a slight downgrade in industrial demand, Macquarie raised its annual silver price forecast by 2-4%, citing its value as a precious metal.
What’s Next for Gold?
With ongoing economic uncertainties, trade tensions, and inflation concerns, gold prices may continue their upward trend. Investors will closely watch upcoming economic reports and Federal Reserve decisions for further market direction.
As the global economy faces challenges, gold remains a preferred choice for investors seeking stability.
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