Gold Prices Jump Amid New US Tariffs and Safe-Haven Demand
Thank you for reading this post, don't forget to subscribe!Jaipur, Rajasthan, India – Gold prices are on the rise today, Thursday, July 31, 2025, rebounding from a recent one-month low. This surge is largely fueled by renewed investor interest in the precious metal as a safe haven, following US President Donald Trump’s announcement of fresh tariffs that have sent ripples through global trade sentiment. India’s gold market is experiencing an additional push from a weaker rupee.
Current Gold Rates
As of 2:30 PM GMT (8:00 PM IST), spot gold saw a 0.5% increase, reaching $3,292.24 per ounce. This marks a significant recovery from its dip to $3,267.79 on Wednesday, July 30, which was its lowest point since June 30. Meanwhile, US gold futures edged slightly lower by 0.2% to $3,287 per ounce, as some traders opted to book quick profits.
In India, gold prices continue to follow global trends with an added boost from a depreciating rupee. According to Goodreturns, the price of 24-karat gold stands at ₹10,003 per gram. 22-karat gold is trading at ₹9,170 per gram, and 18-karat gold is priced at ₹7,503 per gram.
Jateen Trivedi, VP Research Analyst at LKP Securities, noted a shift in the domestic trading range, now expected to be between ₹98,500 and ₹1.01 lakh per 10 grams.
What’s Driving the Gold Rally?
The primary catalyst for gold’s recent bounce back is President Trump’s announcement of new tariffs. These measures include a 25% tariff on Indian goods, effective tomorrow, Friday, August 1, alongside a 15% tariff on imports from South Korea, and the removal of an exemption for low-value shipments. Trump also hinted at ongoing negotiations with China, expressing optimism for a “fair deal soon.”
Such trade uncertainties typically steer investors toward gold, as it’s widely perceived as a reliable safe-haven asset during periods of geopolitical and economic stress, offering protection against potential economic shocks and currency volatility.
Federal Reserve’s Role and Future Outlook
The US Federal Reserve’s decision to keep interest rates steady at its latest meeting introduces complexity to gold’s outlook. Normally, a rate hold would limit gold’s upside, as bullion doesn’t offer interest and competes with yield-bearing assets. Ross Maxwell, Global Strategy Lead at VT Markets, pointed out that the Fed’s steady rates (4.25%–4.50%) saw two dissenting votes for the first time in decades. Chair Jerome Powell’s remarks about inflation remaining above target, coupled with no firm decision on the September meeting, have dampened near-term rate cut expectations and supported the US dollar—which typically puts downward pressure on gold.
Despite this, analysts remain optimistic that gold could hold firm. Much hinges on upcoming economic data, particularly the US Core PCE index (the Fed’s preferred inflation gauge), which is due for release today, July 31, 2025. Additionally, jobs and wage numbers for July, expected tomorrow, August 1, 2025, will be closely watched. Any indication of slowing inflation or a weaker employment market could reignite hopes for rate cuts, potentially giving gold another significant boost.
Strong Domestic Demand in India
In India, local factors are expected to provide a cushion against global headwinds. Aksha Kamboj, Vice President of the India Bullion and Jewellers Association and Executive Chairperson of Aspect Global Ventures, anticipates strong domestic demand to persist.
“Gold may continue to attract buying interest at lower levels, supported by strong domestic demand ahead of the festive season and ongoing purchases by global central banks,” Kamboj stated. India remains one of the world’s leading consumers of physical gold, and the upcoming festive season, including Raksha Bandhan, Ganesh Chaturthi, and Diwali (spanning from August to November), traditionally sees a significant surge in demand.
Considering the confluence of global trade tensions and strong domestic buying, how do you think these factors will balance out for gold prices in the coming months?
