Gold Prices In India: 24K, 22K, 18K Gold Outlook In Near Term; Trump's Tariffs To Temper Yellow Metal?

Gold prices in India held a steady performance on Tuesday, January 21, after Donald Trump's inauguration as the 47th US President on January 20th. 24K gold price stood at Rs 81,230 per 10 grams, while MCX gold price climbed to near Rs 79,000 mark. Nearly a 1% surge was recorded in MCX gold. This tracked the performance of international prices which surged to nearly $2,730 an ounce. The short-term outlook for gold continues to be favourable owing to Trump's tariff uncertainties, overshadowing the impact of the Israel-Hamas ceasefire deal.

Gold Prices In India:

24K gold price stood at Rs 81,230 per 10 grams on January 21, while 22K and 18K gold prices were at Rs 74,500 and Rs 61,000 per 10 grams. Gold prices have surged by more than 4% each in 24K and 22K at retail stores in India. The highest price level was seen on Tuesday, after Trump's inauguration.

Silver Prices In India:

Meanwhile, silver prices in India stood steady at Rs 96,500 per 1kg. In cities like Chennai, Kerala and Hyderabad, the silver price was at Rs 1,04,000 per 1kg. Silver gained by nearly 7% in January 2025 so far.

MCX Gold, Silver Prices:

MCX gold price, with February 2025 expiry, jumped by Rs 400 or 0.51% to Rs 78,944 per 10 grams, at the time of writing. The bullion traded near its intraday high of Rs 78,976 per 10 grams.

Further, MCX's silver price, with a March 2025 expiry, climbed by Rs 704 or 0.8% to trade at Rs 92,146 per 1 Kg. This was near its intraday high of Rs 92,361 per 1kg.

Spot Gold Price:

As per Trading Economics data, gold price above $2,720 per ounce on Tuesday, extending gains from the previous session as investors remain focused on the potential impact of U.S. President Donald Trump's policies during his second term. Trump said he may impose 25% tariffs on Mexico and Canada starting early next month, though he did not provide a timeline for China tariffs. These tariffs, if enacted, could trigger a trade war, heightening demand for safe-haven assets like gold. Simultaneously, investors are weighing inflation risks, as Trump's agenda of tax cuts and increased government spending could contribute to rising price pressures, potentially limiting the Federal Reserve's ability to ease monetary policy.

Should You Buy Gold In Short Term?

Dr. Renisha Chainani, Head of Research at Augmont explained that gold has risen more than 3% and Silver by 7% in January till date supported by safe-haven demand amid political and economic uncertainties. The main factor supporting prices is the speculation of President-elect Trump imposing tariffs after his inauguration ceremony on 20Th January.

Upon taking office, Trump indicated that he would enact a wide range of tariffs, such as a blanket tariff of 10-20% on all imported goods, an additional tariff of 60-100% on Chinese goods, a 100% tariff on BRICS nations if they try to challenge the U.S. dollar's position as the world's reserve currency and a 25% tariff on all goods imported from Canada and Mexico. Notably, he intends to apply at least a portion of these tariffs right away. In support of the "Make America Great Again" agenda, proponents of tariffs claim that these policies will restore jobs to the US, Chainani highlighted.

Additionally, the expert mentioned that tariffs are a geopolitical stick in Mr. Trump's case. Threatening Mexico, Canada, and other nations with tariffs is one way his administration coerces them into helping with internal problems in the United States, such as drug smuggling and illegal immigration from Mexico. Tariff increases would be detrimental to the American economy and its trading partners.

"A fresh tariff increase would result in economic repercussions globally, considering the pivotal role of the U.S. economy in the global marketplace. A trade war in which the United States faces retaliation from major trading partners through their tariff increases would be a more worrisome situation," Chainani added.

According to the expert, Trump's inauguration and expected trade policies, which could lead to inflation and conflicts in international commerce, are being eagerly watched by traders. Given their ability to upend international markets, broad tariffs put forth by the new administration are seen to be one of the possible factors contributing to gold's appeal as a safe-haven. As investors look for protection against negative risks resulting from policy uncertainty, these worries have led to an increase in hedging activity.

The short-term outlook for gold is still favourable due to tariff uncertainty, but maintaining these gains will need further Fed rate cuts and ongoing dollar weakening. Trump's policy announcements should be watched by investors for possible effects on the market, Chainani added.

Another key focus area will be ank of Japan's Interest Rate decision on January 24. The expert said, "Recent inflation and wage figures look promising and back its plan to increase interest rates at this week's meeting."

Technically, Chainani said, gold has given a breakout from its symmetrical Triangle at Rs 78500. This week we are likely to see this uptrend continuing and gold breaking its previous record high of $2800 (Rs 80,000).