Gold and silver rally as dollar falls on Trump's sweeping tariff hike

 

Published : 06 March, 2025 07:38 AM | Modified : 07 March, 2025 06:54 AM 

More signs of worsening US economic conditions will lead to a new surge in gold and silver

Gold and silver rallied as the dollar fell to a four-month low on signs of worsening economic conditions after Trump imposed tariffs on a range of goods imported into the US . Gold had fallen after hitting an all-time high of $2,956.15 on February 24 in the global market, but have rebounded in the last three days, rising to $2,923.70 and silver to $32.44.

In the Mumbai jewellery market, gold prices fell by Rs 132 per 10 grams. However, silver prices rose by Rs 700 per kg. Silver rose for the third consecutive day, with the price of silver increasing by Rs 2,513 in the last three days.

Economic Indicator

Donald Trump announced tariffs on copper and other base metals imported into the US. The tariffs imposed on copper, which accounts for 50 percent of its copper needs, have led to a sharp rise in copper prices. The announcement of tariffs on all agricultural products imported into the US from April, after the implementation of tariffs on Canada, Mexico and China, has hit a major blow to the US economic condition, sending the dollar index down 0.8 percent to a four-month low of 104.85 points. The dollar also fell due to the strength of the yen after the Bank of Japan's deputy chairman announced another interest rate hike.

The US economic optimism index fell to a five-month low of 49.8 in March, down from 52 in February and the market's expectation of 53.1. The index, which measures the economic outlook for the next six months, also fell 9.1 percent to 46.2, down from 51.1 in February. The index, which measures the personal financial situation of the American public, also fell 1.3 percent to 55.3, down from 56 in February. The index, which measures public confidence in the policies of the American government, also fell 1.8 percent to 47.9, down from 48.8 in February.

Short term - long term  

Due to Trump's wholesale tariff hike, the American economic condition is continuously deteriorating. The dollar index has fallen to a four-month low. If the American economic condition is seen deteriorating further in the data to be released in the next three days, then the pace of the rise in gold and silver will accelerate. The job data of the American private sector, the growth of the service sector-private sector, unemployment benefit numbers and non-farm payroll data, etc.; All these data will clearly depict the state of the American economic condition. All the parameters of the Economic Optimism Index show a clear picture of the economic conditions worsening further in the coming days, while gold and silver will get double support due to weak economic conditions and rising inflation due to trade war. In addition, if the Russia-Ukraine and Israel-Hamas wars continue, gold will also get support from geopolitical tensions. Thus, any reasons against the gold price rally are slowly weakening.

Price range

Gold (99.9 touch, 10 grams): 86,300

Gold (99.5 touch, 10 grams): 85,954

Silver (.999 touch, per kg): 95,993