Gold prices surge to Rs 1 lakh+ amid latest Trump tariff bombshell, how high can it go?

Gold prices climbed sharply on Thursday as tensions escalated between the United States and India following a new round of tariffs imposed by U.S. President Donald Trump, sparking global market jitters and renewed investor appetite for safe-haven assets.

Spot gold rose 0.4% to $3,383.49 per ounce in early trade, while U.S. gold futures advanced 0.6% to $3,453.30. In India, 24-karat gold prices crossed the Rs 1 lakh mark again, hitting Rs 1.02 lakh per 10 grams, with 22-karat gold at ₹93,810, according to Goodreturns.

The surge comes after Trump’s August 6 executive order imposed an additional 25% tariff on all Indian imports, compounding earlier penalties related to purchases of Russian oil. The decision has rattled financial markets and cast a shadow over already strained trade relations between the two democracies.

Equity markets reacted swiftly. Indian benchmarks slipped 0.5% in early trade, marking their third consecutive day of decline. Export-driven sectors—textiles, gems, leather, and chemicals—bore the brunt of investor concerns over the new trade restrictions.

"Trump has been dishing up fresh tariff threats which is keeping gold in the frame as a defensive play for investors," said Tim Waterer, Chief Market Analyst at KCM Trade. “Gold is moving toward the doorstep of the psychological $3,400 an ounce level, with risk assets being kept off-balance.”

Domestic experts agree that gold’s appeal is being reinforced by both global uncertainty and India’s steady macroeconomic conditions.

“Investor sentiment remains cautiously optimistic,” said Aksha Kamboj, Vice President of the India Bullion & Jewellers Association (IBJA). “With inflation expectations now at 3.1% and the repo rate unchanged at 5.50%, gold is an attractive hedge against volatility. The RBI’s dovish stance supports liquidity without fanning inflation.”

Kamboj also noted that recent geopolitical shocks are pushing central banks and investors alike toward precious metals. “Central banks added over 1,000 tonnes of gold to their reserves this year. With the dollar under pressure and global demand rising, the gold rally could persist.”

Jateen Trivedi, VP Research Analyst - Commodity and Currency, LKP Securities, said: "Gold traded positive with gains of Rs 300 at Rs 1,01,500 as Comex gold remained firm above $3375, supported by dollar index weakness below 98. With limited impactful data lined up this week, focus remains on global trade tariffs and fresh Russian sanctions—both contributing to elevated gold prices. Unless there is a resolution or breakthrough in trade talks, gold is expected to stay buoyant. A strong profit booking phase may emerge only if prices breach below Rs 99,500; until then, any dip is seen as a buying opportunity. Gold is likely to remain volatile within the Rs 99,500–Rs 1,03,000 range."

Supporting the rally further, the U.S. dollar index (.DXY) hovered near a one-week low, after weak U.S. jobs data increased expectations of a Federal Reserve rate cut in September. According to the CME FedWatch Tool, traders now price in a 93% chance of a 25-basis-point cut.

Silver, too, is enjoying strong momentum. Prices rose 0.6% to $38.07 per ounce, with Indian rates touching ₹113,485 per kilogram. Industrial demand from solar and EV sectors is adding fuel to the metal’s bullish outlook.

As global trade tensions intensify and equities struggle, analysts suggest investors consider allocating 10–15% of portfolios to precious metals. “Gold and silver are no longer just safe-havens,” Kamboj added. “They are strategic assets for an uncertain decade.”

With tariffs rising and global cooperation faltering, gold may be the one asset still delivering peace of mind.

(With Reuters inputs)