Gold prices in India experienced significant fluctuations on April 7, 2025, as the market grappled with the fallout from escalating global trade tensions. The yellow metal opened higher by Rs 300 per 10 grams, trading at Rs 88,199 for June 2025 contracts on the Multi Commodity Exchange (MCX). However, the international market saw gold prices retreating, with spot gold down 0.1% to $3,034.02 an ounce, marking a decline of over 1% earlier in the session.
In the domestic market, the price of standard gold (22 carat) in Mumbai was reported at Rs 82,850 per 10 grams, while pure gold (24 carat) was priced at Rs 90,380 per 10 grams. The silver market also reflected volatility, with silver prices trading up by 1.47% at Rs 88,490 per kg, despite a substantial drop last week.
The fluctuations in gold and silver prices are largely attributed to the ongoing trade war between the United States and China. Following the U.S. government's imposition of reciprocal tariffs on key trading partners, China retaliated by levying a staggering 34% tariff on U.S. imports. This escalation has led to heightened concerns about a potential global recession, causing investors to liquidate their gold holdings to offset losses in other areas.
Market analysts have noted that the decline in gold prices is indicative of broader market trends. On April 4, 2025, gold futures had settled at Rs 88,075 per 10 grams, reflecting a loss of 2.20%. Similarly, silver futures had fallen to Rs 87,211 per kilogram with a loss of 7.61% during the same period.
Manoj Kumar Jain, a market analyst, provided insights on the support and resistance levels for gold and silver. He stated that gold has support at Rs 87,300-86,500 and resistance at Rs 88,800-89,360. For silver, the support levels are at Rs 85,800-84,500 and resistance at Rs 88,500-90,000.
The broader implications of the trade war are evident in the performance of global markets. Last week, U.S. stock markets faced a substantial decline, with approximately $6 trillion in value wiped out due to recession fears. Japan's Nikkei share average also plummeted nearly 9% on April 7, 2025, reflecting the widespread market downturn.
Moreover, Federal Reserve Chairman Jerome Powell highlighted the risks posed by tariffs, indicating potential for higher inflation and slower economic growth. This has added to the uncertainty surrounding market conditions, with many investors seeking safe-haven assets like gold.
Interestingly, while gold prices are fluctuating, central banks continue to bolster their gold reserves. The Chinese central bank marked its fifth consecutive month of gold acquisitions in March, indicating a persistent demand for the precious metal. Tim Waterer, chief market analyst at KCM Trade, noted that central banks remain keen on adding gold to their reserves, which could support prices in the long term.
In the precious metals market, other commodities showed mixed results. Spot silver increased by 2% to $30.13 an ounce, while platinum rose by 1% to $926.09. Palladium also saw a slight increase, rising nearly 1% to $919.50.
As the week progresses, market participants are closely monitoring key economic indicators, including the upcoming U.S. Consumer Price Index (CPI) and Producer Price Index (PPI) data. These reports could provide further insights into inflation trends and influence the direction of gold prices.
In summary, the gold market is currently experiencing a tumultuous period, driven by geopolitical tensions and market volatility. Investors are advised to stay informed about market conditions and potential shifts in gold prices as the global economic landscape continues to evolve.
