Gold demand has increased as a strong safe investment option due to increasing tension between the US and China. Due to this, the price of gold globally rose by 6.5 percent last week and on Friday, the spot gold price of gold reached a new peak of $ 3,237.39 an ounce. Later it came to $ 3,22.04 an ounce. In addition, comex gold futures rose to a record high level of $ 3,249.16 an ounce in the Asian market.
Due to the rise in prices in international markets and increased local level demand, the price of gold also increased inside the country. On Friday, the price of gold in Delhi’s bullion market jumped Rs 6,250 to a record high level of Rs 96,450 per 10 grams. The US dollar index fell below 100 points due to the increasing concerns of tariff war and the possibility of global economic softening. The dollar has reached a 3 -year low against the euro. Large selling started in American shares and treasury bonds. Investors are selling money in gold in terms of investment by selling in American assets.
Talking about the latest situation of tariff war between the US and China, the US has increased the tariff on Chinese goods to 145 percent. These include a 125 percent recipe tariff and 20 percent separate tariffs, which were imposed earlier this year over China’s alleged major role in the supply of Phentineile. At the same time, China has also increased the tariff on American goods to 125 percent. However, an update is also that the US has excluded some consumer electronics including smartphones, computers. Due to this, a recipe of 125 percent will not be applicable on smartphones, tabs, computers etc. coming to America in China. However, the tariff of 20 percent separately will remain intact.
Central bank and ETF leading demand
Apart from investors, the demand for gold has also increased from institutions and central banks. In the first quarter i.e. January -March investment in Gold based on Gold was the highest after 2020. At the same time, the central banks, especially the central banks of emerging markets, are depositing physical gold for diversification outside the dollar. Gold demand in China has increased so much that purchases are being done at more premium than global spot prices. This trend is pointing towards increasing concern in the Asian markets regarding instability in the financial system.
UBS now expects the price to reach $ 3,500 per ounce
In view of the increasing demand for central banks and institutions, investment banking company UBS has increased its 12 -month estimate for gold to $ 3,500 an ounce. The UBS has increased the estimate for the second time. According to the UBS, there can be an increase in gold attractions that can lead to gold attractions, such as business and economic uncertainty, probability of inflation, recession risk and geopolitical tension.
At the same time, Amit Goyal, the Chief Global Strategist of Pace 360, believes that now gold can come in medium term correction within 6 to 10 months. They estimate that prices may fall by $ 2,600 an ounce. If the correction is more deep then prices can go up to $ 2,400-$ 2,500 an ounce. Goyal also believes that gold prices can reach $ 4,000- $ 4,500 an ounce by 2028-29.
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