Market Volatility and Gold as a Safe Haven Asset
Gold prices have reached an all-time high in India and the world, with the US President Donald Trump’s trade and economic policies continuing to shake markets. The price of 99.99 per cent pure gold in India has crossed the Rs 1 lakh-mark for the first time, reaching a peak of Rs 99,800 per 10 grams. The price of gold has risen by 26.41 per cent this year, according to PTI, with concerns over global economic growth and the escalating US-China trade war driving the price up. A weaker dollar has added to the momentum, with the International Monetary Fund (IMF) warning of a slowdown in global growth due to trade tensions.
Gold’s Intrinsic Value and Universal Appeal
Gold has long been seen as a safe haven asset, with its intrinsic value and universal appeal making it a hedge against inflation and shaky markets. In the international market, gold prices have touched a record high of $3,494.66 per ounce on Monday, according to Reuters. In India, gold has delivered an annualised return of about 13.8 per cent, comparable to BSE Sensex’s 14.1 per cent returns, as per Moneycontrol. However, gold has provided a counterbalance during turbulent times, such as the current phase when Trump’s policies have shaken up markets.
US-China Trade War and Geopolitical Risks
The escalating US-China trade war has contributed to the rise in gold prices, with concerns over global economic growth and stagflation adding to the momentum. As Renisha Chainani, head of research at Augmont, pointed out, “Fundamentally, markets are pricing in increased geopolitical risks, fueled by US trade tensions and stagflation concerns, while persistent central bank demand adds to price pressures.”
Trump’s Policies and Market Volatility
Trump’s attacks on the Federal Reserve have plunged the US markets, with the Dow Jones down 2.5 per cent, the S&P 500 down 2.4 per cent, and the NASDAQ down 2.6 per cent.
Gold as a Safe Haven Asset in Turbulent Times
Gold has long been seen as a safe haven asset, with its intrinsic value and universal appeal making it a hedge against inflation and shaky markets. In the current phase, gold has provided a counterbalance to the turbulent markets, with its price reaching an all-time high in India and the world.
| Key Points | Details |
|---|---|
| Gold prices have crossed the Rs 1 lakh-mark for the first time in India. | The price of 99.99 per cent pure gold reached Rs 99,800 per 10 grams. |
| Gold prices have risen by 26.41 per cent this year. | Concerns over global economic growth and the escalating US-China trade war have driven the price up. |
| Gold has provided a counterbalance during turbulent times. | Trump’s policies have shaken up markets, but gold has provided a counterbalance. |
Conclusion
In conclusion, gold has reached an all-time high in India and the world, with its intrinsic value and universal appeal making it a hedge against inflation and shaky markets. As the global economy continues to be affected by the escalating US-China trade war and Trump’s policies, gold is likely to remain a safe haven asset during turbulent times.
