New Delhi: Gold prices jumped 6.5 per cent this week, reaching a record high of USD 3,237 per troy ounce. This marks the metal’s strongest weekly gain since the early days of the COVID-19 pandemic.
Global Uncertainty Sparks Investor Worries
The rise in gold prices comes amid growing fears about the global economy. US President Donald Trump recently introduced a new set of tariffs, which triggered strong reactions from investors. Stocks and US Treasury bonds are falling as people move their money into safer assets like gold.
US Dollar Weakens, Boosting Gold’s Appeal
The US dollar has dropped to a three-year low against the euro. A weaker dollar makes gold cheaper for buyers using other currencies, which has increased demand even more.
Trade War Fears Add Fuel to the Fire
On Friday, China responded to the US tariffs by slapping a 125% tariff on American goods. This sharp move has made investors nervous about a possible full-scale trade war. When tensions rise, gold usually performs well because it’s seen as a safe place to put money.
Demand Grows from Investors and Central Banks
Not just regular investors, but big institutions and central banks are also buying gold. Gold-backed ETFs (exchange-traded funds) had their largest inflow since 2020 in the first quarter of this year. Many central banks, especially in emerging markets, are buying more gold to reduce their reliance on the US dollar.
China Shows Strong Local Demand
In China, domestic demand for gold is so high that buyers are paying more than the global market price. This shows growing concern in Asian markets over financial risks.
UBS Raises Forecast as Gold Outlook Strengthens
Swiss financial giant UBS has raised its 12-month gold price forecast to USD 3,500 per ounce. This is the second time this year they have increased their target, showing just how quickly market conditions are changing.
