Gold price today: MCX gold rate dips. Should you buy as Donald Trump’s tariff uncertainty fuels safe-haven demand
- Gold rate today: MCX gold rate today opened with a downside gap at ₹86,058 per 10 gm and touched an intraday low of ₹85,980 within a few minutes of the Opening Bell
Gold rate today: Following the rise in safe-haven demand for gold on macro-economic uncertainty caused by Donald Trump's tariff rant, MCX gold rate continues to trade above ₹86,000 per 10 gm mark. Gold futures contract opened with a downside gap at ₹86,058 per 10 gm and touched an intraday low of ₹85,980 within a few minutes of the Opening Bell on Wednesday.
According to experts, gold prices are under pressure as the US dollar has rebounded from two-month lower levels, putting some breaks on the gold price rally. However, the recent imposition of new tariffs by the Donald Trump administration in the US is going to keep the yellow metal's safe-haven demand intact. They advised a ‘buy-on-dip' strategy as MCX gold rates are expected to sustain above their current support at ₹85,500 per 10 gm.
Triggers for gold price rally
"The prospect of escalating trade tensions bolstered gold's safe-haven appeal. However, hawkish comments from Federal Reserve officials limited further gains. Fed Governors Bowman and Waller expressed cautious views on additional interest rate cuts, citing persistent inflationary pressures. Investors are now focused on releasing the Fed's meeting minutes on Wednesday, which could provide further insights into the central bank's policy outlook. Additionally, geopolitical developments, including the ongoing Russia-Ukraine conflict, remain a key factor influencing market sentiment," Kotak Securities said.
"We are seeing increased safe-haven demand due to the disrupted nature of the Trump administration, and we also have a bullish chart posture," said Jim Wyckoff, a senior market analyst at Kitco Metals.
Since taking office last month, Trump has swiftly redrawn the global trade battlefield with a series of tariffs. Plans are already in motion for sweeping reciprocal tariffs aimed squarely at any nation that taxes US products.
"Central bank buying should also continue to provide support," Commerzbank analysts said in a note.
US Fed rate cut in focus
The market's focus has now shifted to the US Federal Reserve's January meeting minutes, due on Wednesday, for clues into the central bank's interest rate trajectory.
"If the economy starts to sputter because of the trade tariffs and such, then we could see some lower interest rates," Wyckoff added.
Gold price outlook
“The current dip in MCX gold rate can be attributed to the rebound in the US dollar rate from the two-month lower levels. This strength in the US dollar is put breaks on the gold price rally. Overall, the outlook for gold price is positive as MCX gold rate is expected to sustain above its crucial support at ₹85,500 per 10 gm,” said Anuj Gupta, Head — Commodity & Currency at HDFC Securities.
Anuj Gupta added that Donald Trump's move to impose new tariffs is expected to support gold prices at lower levels. So, one should maintain a buy-on-dips strategy as yellow metal may witness a sharp rebound from the lower levels.
(With inputs from Reuters)
Disclaimer: The views and recommendations provided in this analysis are those of individual analysts or broking companies, not Mint. We strongly advise investors to consult with certified experts before making any investment decisions, as market conditions can change rapidly and individual circumstances may vary.
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