Gold hit a new record high on March 31, surpassing $3100 per ounce for the first time.
Prices are rising due to concerns about the impact of the US reciprocal tariff on the global economy, which will take effect on April 2.
Spot gold reached $3,106.50 per ounce on March 31. Gold has been setting new record highs for the past three months, rising more than 18% this year alone, with an 8% increase in March.
Concerns Over Reciprocal Tariffs
Gold reached $3,107.26 per ounce before prices softened slightly. There was a holiday in India on March 31 due to Eid, meaning the commodity exchange (MCX) was closed.
However, the last closing price of gold futures on MCX was $88,850 per ounce. Analysts predict that the gold price surge may continue.
Tim Waterer, Chief Market Analyst at KCM Trade, mentioned that market concerns have increased ahead of the US reciprocal tariffs announcement, pushing gold prices to new highs.
Global Trade War Risks
Waterer explained that if the US government doesn’t announce tariffs as high as expected, gold prices might decrease. Investors may also sell off gold at these record levels.
President Trump is expected to announce reciprocal tariffs on April 2, with auto tariffs starting on April 3.
On March 30, Trump also expressed frustration with Russian President Vladimir Putin, stating that he could impose additional tariffs of 25-50% on countries purchasing oil from Russia if he feels Russia is obstructing peace efforts in Ukraine.
Potential Issues for India
Experts warn that a secondary tariff of 25-50% on countries buying oil from Russia could create problems for nations like India.
Since the Russia-Ukraine war began in 2023, India has been purchasing cheaper oil from Russia.
Moreover, a global trade war could result from the implementation of reciprocal tariffs, which would directly impact gold prices. As a result, many banks have raised their gold price forecasts.
What Should You Do?
Financial advisors recommend that investors include gold in their portfolios, suggesting 10-15% of the portfolio should be in gold.
Those without gold or with minimal gold exposure should gradually increase their investments. With prices at a relatively low point, buying gold now is a good opportunity.
You can invest in Gold ETFs and Mutual Fund Gold Schemes from home. A demat account is required for Gold ETFs, but it is not needed for mutual fund gold schemes.
