Gold Prices Soar Amid Global Economic Tensions

Gold prices experienced a notable 0.3% increase globally in July, reaching USD 3,299, amid a strengthening US dollar, according to a report by the World Gold Council. This marks a 26% rise in gold prices for the year 2025.

The upward trend was fueled by growing global inflation expectations and the tariff tensions linked to President Trump's reciprocal tariffs plan. This economic uncertainty provided a robust boost to international gold prices.

The strong US dollar posed a challenge in July, though global gold ETFs saw positive inflows, particularly in North America and Europe. In Asia, inflows were modest while other regions experienced mild outflows, indicating varied market responses.

A separate report by the World Gold Council highlights that global inflows into gold are poised to make this year the second strongest on record. Historically, gold remains a favored asset during turbulent times due to its ability to retain value.

In India, a crucial gold market, spot gold prices escalated by approximately Rs 4,000, reaching Rs 103,825 per 10 grams, breaking the Rs 1 lakh threshold due to a weak domestic currency and rising demand for safe-haven assets.

October gold futures on the Multi Commodity Exchange of India (MCX) were trading at Rs 102,047 per 10 grams, underscoring the rapid climb in gold prices, which have soared over 40% over the past year.

Analysts emphasize a consumer shift in India, with buyers avoiding short-term purchases and opting for 18-carat jewellery over the traditional 22-carat due to the unexpected rise in gold prices, as noted by a top official at a leading gold jewellery chain.

(With inputs from agencies.)