Gold prices rallied sharply this week, climbing from a Monday low of $2,970 per ounce to an intraday peak of $3,154.70 on Thursday, a 6.2% gain in just four trading sessions. The surge reflects escalating U.S.-China trade tensions, with investors flocking to bullion as a hedge against economic uncertainty.
The catalyst came Wednesday when former U.S. President Donald Trump announced tariffs on Chinese imports would rise from 104% to 125%, marking the latest salvo in a renewed trade conflict between the world’s two largest economies. While the U.S. temporarily paused tariffs for other nations, the direct targeting of China, the top metals consumer, triggered immediate risk-off sentiment across markets.
This geopolitical friction has amplified gold’s appeal as a store of value, particularly amid concerns that retaliatory measures could slow global growth and prolong inflationary pressures. Marex analyst Edward Meir noted, “A slow growth phase would likely push interest rates lower, creating ideal conditions for gold as tariff-driven inflation persists”.
The rally accelerated Thursday morning, with spot gold (XAU/USD) jumping 1.2% to $3,119.18 by 0300 GMT before extending gains. This follows a bullish technical setup identified by analysts, including a potential breakout from a “Triangle” pattern that could propel prices toward $3,145-$3,200 in the near term.
The momentum in the market is being driven by three key factors: upcoming U.S. Consumer Price Index data on Thursday and Producer Price Index figures on Friday, which could heighten inflation hedge demand by reinforcing concerns about persistent price pressures; a softer U.S. dollar outlook amid anticipated Federal Reserve rate cuts, reducing the opportunity cost of holding non-yielding bullion; and a technical breakout after prices breached critical resistance near $3,065, with Marex analysts suggesting the $3,200 level appears achievable by month-end.
In India, June gold futures on the Multi Commodity Exchange (MCX) traded near ₹89,950 per 10 grams ($3,083/oz equivalent) on April 9, with analysts at Deutsche Bank forecasting continued momentum in local prices. The 22-carat and 24-carat variants saw broad-based demand, reflecting retail investors’ preference for physical assets during periods of market stress.
While short-term pullbacks toward $3,015 support remain possible, the combination of technical tailwinds and macroeconomic uncertainty creates a favorable environment for gold. As trade negotiations enter a volatile phase and central banks maintain dovish inclinations, the precious metal appears positioned to challenge record highs above $3,200 in coming weeks.
