New Delhi: The recent uncertainties surrounding Trump's plan for reciprocal tariffs and its announcement this week have provided a significant boost to international gold prices, which have been on an upward trend for some time.
On the day Trump revealed the reciprocal tariffs, gold prices surged, approaching record highs of USD 3,201 per ounce. Analysts anticipate that the demand for safe-haven gold will continue to rise amid fears of an escalating trade war.
Data indicates that gold prices experienced an extraordinary increase in 2025, climbing over 20 percent. In the past year alone, prices have surged by approximately 40 percent.
NS Ramaswamy, Head of Commodities at Ventura, noted that the immediate market response to the announcement of 'Liberation Day' tariffs is driven by heightened inflation concerns and the overall health of the US economy.
"Additionally, geopolitical and economic instability is enhancing gold's appeal as a safe haven. Given the economic slowdown and rising fears of recession or stagflation, demand from central banks for gold is expected to increase from the current average of 10 percent in reserves," Ramaswamy stated.
Ashokbhai Minawala, a well-known jeweller from Mumbai's Zaveri Bazaar, expressed that the industry must observe the government's response to the Trump tariffs.
"While those in the domestic gems and jewellery sector remain largely unaffected, exporters will face significant challenges. A tariff rate of 26 percent is not sustainable," Minawala remarked.
The World Gold Council has provided a similar assessment regarding India's gems and jewellery industry.
"Increased duties could negatively affect exports, particularly in the gems and jewellery sector, which represents just over 12 percent of India's total exports. The full impact will become evident in the near future once the specific tariff details are released," stated Sachin Jain, Regional CEO of India at the World Gold Council. Amid global trade uncertainties, the demand and price for gold have surged as investors seek safe-haven assets.
"Gold reached an all-time high as anxious investors flocked to safe-haven investments following US President Donald Trump's announcement of unexpectedly high tariffs on major trading partners, escalating the global trade conflict," noted Manav Modi, Senior Analyst in Commodity Research at Motilal Oswal Financial Services.
For India, this situation poses a significant challenge.
"Overall, the impact will be around 26 percent, with the Gems and Jewellery sector facing the brunt of it, as import tariffs could rise to 20 percent from the current 0 percent on loose diamonds and 5.5-7 percent on gold jewellery. The US is one of India's largest markets for jewellery exports, making up nearly 30 percent of the total, with Indian jewellery exports to the US exceeding USD 11 billion annually," explained Colin Shah, Managing Director of Kama Jewelry.
Shah recommended that the Indian government should focus on reducing tariffs on US goods imported into India.
"Efforts should be directed towards rationalizing import duties and balancing trade with all key nations. While import duties are intended to protect domestic industries, retaliatory tariffs may ultimately undermine this objective," Shah added.
Following Trump's announcement of reciprocal tariffs, gold prices surpassed the USD 3200 threshold.
