Gold prices on the Multi Commodity Exchange (MCX) surged to a record high on Thursday, driven by escalating trade tensions between the US and China, a weakening US dollar, and firm spot demand. The MCX Gold June 5 contract climbed to an all-time high of Rs 95,935 per 10 grams during intraday trade. By around 11:20 AM, the contract was trading slightly higher at Rs 95,685, up 0.03 per cent.
The upward momentum in domestic prices mirrors international trends, where gold also hit historic highs as investors rushed towards safe-haven assets amid rising geopolitical and economic uncertainty.
A significant factor fueling the rally is the intensifying trade war between the world's two largest economies. As reported by Reuters, US President Donald Trump recently ordered an investigation into possible new tariffs on imports of critical minerals, pharmaceuticals, and semiconductors. This comes in the wake of his decision to impose a steep 245 per cent tariff on Chinese imports, further straining relations and sparking concerns about global economic growth.
Jateen Trivedi, Vice President and Research Analyst for Commodity and Currency at LKP Securities, noted, “The rally is largely driven by geopolitical uncertainty and the absence of any constructive progress in tariff negotiations between the US and China. Until there is a concrete update indicating de-escalation, gold is likely to remain elevated.”
Trivedi also cautioned that the rally could lose steam if there is any positive development in US-China trade talks or signs of easing tensions.
Another key support for gold is the declining US dollar, which is on track for a fourth straight weekly loss. The weakening currency makes gold cheaper for overseas investors, thus boosting demand.
In the previous session, the MCX Gold June 5 contract settled with a strong 2.42 per cent gain at Rs 95,710 after briefly touching a lifetime high of Rs 95,740.
Global uncertainty, particularly from Trump’s aggressive trade policies, continues to drive gold prices higher. So far this year, domestic spot gold prices have risen by 24 per cent.
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There are also broader economic concerns. According to Reuters, Federal Reserve Chair Jerome Powell stated on Wednesday that the central bank would wait for more clarity before adjusting interest rates. He added that Trump's tariff actions could negatively impact inflation and employment, potentially complicating the Fed's policy direction.
Looking ahead, Trivedi forecasts that MCX Gold may trade within a range of Rs 94,000 to Rs 95,500, depending on global developments.
Manoj Kumar Jain of Prithvifinmart Commodity Research added that gold has support at $3,300–3,274 and resistance at $3,374–3,400 per troy ounce in international markets. On MCX, gold is supported at Rs 95,050–94,400, with resistance seen at Rs 96,000–96,600.
Jain recommends buying gold near Rs 95,200 with a stop loss of Rs 94,750, aiming for a target of Rs 96,000. He also suggests buying silver near Rs 95,800 with a stop loss of Rs 95,220 for a target of Rs 97,000.
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