Gold hits Rs 1,27,950; Silver soars amid US-China tensions

Gold prices surged sharply on Monday, rising by Rs 1,950 to reach a record high of Rs 1,27,950 per 10 grams in Delhi, driven by renewed safe-haven demand amid escalating US-China trade tensions.

According to the All India Sarafa Association, 99.9 per cent purity gold had closed at Rs 1,26,000 per 10 grams on Friday. Similarly, gold of 99.5 per cent purity climbed by Rs 1,950 to touch an all-time high of Rs 1,27,350 per 10 grams, inclusive of all taxes. It had traded at Rs 1,25,400 per 10 grams in the previous session.

“Gold prices rose sharply as renewed US-China trade tensions reignited safe-haven demand,” said Jateen Trivedi, Vice President and Research Analyst for Commodities and Currency at LKP Securities. He added that the US administration’s announcement of a 100 per cent tariff increase on select Chinese products, coupled with China’s threat to restrict rare earth exports, had heightened global uncertainty and risk aversion.

In 2025 so far, gold has recorded a remarkable rally of Rs 49,000, or 62.06 per cent, rising from Rs 78,950 per 10 grams on December 31, 2024.

Silver also witnessed robust gains in the spot market. Prices jumped by Rs 7,500 to a new record of Rs 1,79,000 per kilogram on Monday, compared with Rs 1,71,500 per kg on Friday. In the current year, silver prices have almost doubled, surging Rs 89,300 or 99.55 per cent, from Rs 89,700 per kilogram at the end of 2024.

Colin Shah, Founder and Managing Director of Kama Jewelry, said that despite record-high gold prices, festive season demand in the gems and jewellery sector is expected to remain strong. “The sentiment among buyers is likely to remain upbeat, influenced by festive buying, increased disposable income, and the traditional affinity of Indian consumers for gold,” he noted.

Shah added that consumer preferences are increasingly shifting towards lightweight jewellery for adornment rather than investment. He projected that demand for jewellery in the 9k to 18k segment, particularly heavier designs, would see a significant rise during the festive season. Overall sales in the sector are expected to grow by 18–20 per cent, providing some relief amid heavy export tariffs.

Internationally, spot gold rose 2 per cent to a record USD 4,096.64 per ounce. Dilip Parmar, Research Analyst at HDFC Securities, attributed the surge to robust festive demand, supply constraints, and increased accumulation by central banks. “The current secular bull market for precious metals continues, supported by both investment momentum and seasonal buying cycles,” he said.

Spot silver in overseas markets climbed over 3 per cent to a fresh high of USD 51.99 per ounce. “Silver prices jumped above USD 51 per ounce on Monday, driven by geopolitical tensions, political instability, and expectations of US rate cuts, which have increased demand for safe-haven assets,” said Jigar Trivedi, Senior Research Analyst at Reliance Securities.

The US-China trade conflict intensified last week when US President Donald Trump threatened a 100 per cent tariff on Chinese goods effective November 1, in response to Beijing’s new export controls on rare earth minerals. However, Trump later indicated willingness to negotiate, suggesting that trade relations could improve following a potential meeting with President Xi Jinping later this month.

Expectations of a 25-basis-point rate cut by the Federal Reserve later in October and again in December, coupled with a tightening physical silver supply in London, have further supported the ongoing rally in precious metals, analysts said.

The combined impact of geopolitical uncertainty, investment demand, and festive season buying has contributed to record highs for both gold and silver, reinforcing their status as preferred safe-haven assets amid global economic volatility.