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Gold Insight

MCX Gold prices surged 13% YTD, hitting an all-time high of Rs.89,000 per 10g, tracking a 16% global rally fueled by geopolitical instability and U.S. tariff policies. On March 19, the Federal Reserve’s policy stance and fresh economic projections remained key drivers, with markets anticipating two rate cuts in 2025. Meanwhile, gold imports dropped to an 11-month low, falling 63% YoY in February due to soaring prices, limiting supply in domestic markets. Gold ETFs attracted Rs.19.8bn inflows, marking the 10th consecutive month of positive flows, while RBI’s gold reserves remained steady at 879t, signaling central bank confidence in gold’s long-term value

The Dollar Index (DXY) has fallen sharply, losing over 3% in the last three months, recently touching a five-month low of 103.25 before a marginal recovery to 103.5. The Federal Reserve’s rate cut expectations continue to weigh on the greenback, with markets factoring in two 25 bps cuts in 2025, and rising speculation of a third. Meanwhile, Trump’s aggressive trade policies and 25% tariffs on steel and aluminum have fueled inflation concerns while dampening economic confidence. Weakening growth data and consumer sentiment further pressured the dollar, leading to capital flows favoring the euro and other major currencies over the past quarter

Global markets remain highly volatile as a mix of geopolitical conflicts, trade wars, and monetary policy shifts drive investor sentiment. The U.S. Federal Reserve's cautious stance on interest rates, with expectations of two cuts in 2025, has weakened the dollar, pushing it down over 3% in the last three months. Meanwhile, rising geopolitical risks have fueled safe-haven flows, sending gold prices to a record $3,040/oz. The latest Israeli strike on Gaza, coupled with Russia’s strategic military shifts in Ukraine, has heightened global instability. Additionally, Trump’s aggressive tariff policies, particularly the 25% steel and aluminum duties, are raising inflation risks and complicating global trade, adding further pressure to economic outlooks worldwide.

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