Gold price today: Rates jump 3% to hit a record high as US–EU trade war fears boost safe-haven demand, drag dollar down

Gold price today: Gold rates surged by over ₹4,100, or almost 3%, on the MCX on Wednesday (January 21) morning, hitting a fresh record high, fuelled by US-EU trade war fears, the dollar's weakness and strong retail demand.

MCX gold February futures jumped by over ₹4,100, or nearly 3%, to hit a record high of ₹1,54,710 per 10 grams, while MCX silver March futures rose by over ₹2,800, or nearly 1%, to ₹3,26,487 per kg during the morning session.

International gold prices also hit record highs; US gold futures jumped nearly 2% to $4,847.20 per troy ounce.

The United States (US) and the European Union (EU) are on the cusp of a major trade war that could have serious ramifications for the global economy and potentially even upend the NATO alliance.

As per media reports, the European Parliament may soon announce the suspension of approval of the US trade deal agreed in July.

Moreover, US President Donald Trump said on Tuesday that he would not back down from his push to acquire Greenland, according to news agency Reuters.

Trump has announced a 10% tariff on eight European countries— Denmark, Norway, Sweden, France, Germany, the United Kingdom, the Netherlands and Finland— from February 1, and threatened these tariffs would be raised to 25% from June 1, 2026.

European countries are reportedly considering activating the anti-coercion instrument, a trade defence mechanism designed to counter economic pressure from foreign governments.

The tussle between the US and EU is keeping investors nervous, driving them to safe-haven assets like gold. The US dollar has also weakened due to selling by traders and importers. This has also supported gold's ascent.

"Gold and silver extended their gains and hit fresh record highs amid global uncertainty due to the escalation of the trade war. Global equity markets crashed amid the escalation of the trade war, driven by the U.S. President’s ambition to annexe Greenland. Panic selling in riskier assets is supporting safe-haven buying for both precious metals," Manoj Kumar Jain of Prithvifinmart Commodity Research observed.

"The U.S. 10-year bond yields hit four-month highs due to panic selling in the Japanese bond, and also supported both precious metals. Weakness in the rupee is also supporting gold and silver prices. We are experiencing very high price volatility in both precious metals," Jain said.

Jain expects silver to hold its support level of $84 per troy ounce and gold to hold its support level of $4,440 per troy ounce on a closing basis.

Key levels to watch

According to Jain, gold has support at $4,740 and $4,685, while resistance is at $4,810 and $4,855 per troy ounce, while silver has support at $92.40 and $89.80, while resistance is at $96.60 and $98.80 per troy ounce in today’s session.

On the MCX, Jain said gold has support at ₹1,48,800 and ₹1,46,600, and resistance at ₹1,52,500 and ₹1,55,000, while silver has support at ₹3,16,000 and ₹3,08,500, and resistance at ₹3,30,000 and ₹3,38,000.

"We suggest strictly avoiding short selling in gold and silver and follow buy on dips strategy until gold is holding above ₹1,44,000 and silver is holding above ₹3,03,000 for the expected targets in gold is ₹1,55,000 and in silver is ₹3,38,000," said Jain.

Rahul Kalantri, VP of commodities at Mehta Equities, said gold has support at $4,695 and $4,625 while resistance is at $4,820 and $4,860. Silver has support at $92.10 and $89.75, while resistance is at $95.95 and $97.40.

In INR, gold has support at ₹1,49,050 and ₹1,47,310, while resistance is at ₹1,51,950 and ₹1,54,470. Silver has support at ₹3,05,810 and ₹2,92,170, while resistance is at ₹3,30,810 and ₹3,35,470, said Kalantri.

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Disclaimer: This story is for educational purposes only. The views and recommendations expressed are those of individual analysts or broking firms, not Mint. We advise investors to consult with certified experts before making any investment decisions, as market conditions can change rapidly and circumstances may vary.