India Gold price today: Gold rebounds as US-China trade war revives haven demand

Gold prices in India witnesses a turnaround Tuesday as the US-China trade war escalates and revives the safe-haven demand for the bullion. 

The Chinese Commerce Ministry warned on Tuesday that it "firmly opposes and will take countermeasures if the US enacts additional 50% tariffs."

US President Donald Trump on Monday threatened to impose a new 50% tariff, which will be cumulative alongside the US's 10% across-the-board tariffs and targeted 34% "reciprocal" tariffs, which are set to take effect on Wednesday, April 9.

Gold price stood at 8,318.25 Indian Rupees (INR) per gram, advancing from the INR 8,251.11 it cost on Monday, according to the FXStreet data. 

Gold price rose to INR 97,023.63 per tola from INR 96,239.36 per tola a day earlier.

Global Market Movers: Gold price retains positive bias amid fears of a global recession

• Investors remain worried that US President Donald Trump's latest trade tariffs would trigger an all-out global trade war and negatively impact the world economy. This, along with the emergence of fresh US Dollar selling, helps revive demand for the safe-haven precious metal during the Asian session on Tuesday.
• Market participants now seem convinced that the Federal Reserve will resume its rate-cutting cycle soon amid worries about the potential economic fallout from Trump's aggressive trade policies. Moreover, Trump called for the Fed to cut interest rates as soon as possible, arguing that the US economy was in a strong position.
• Fed Governor Adriana Kugler said on Monday that the US central bank's focus should be on keeping inflation in check and noted that short-term inflation expectations have risen but remain well-anchored in the longer term. She further added that Fed policymakers are still committed to the 2% inflation target.
• Separately, Chicago Fed President Austan Goolsbee said that a global trade war eruption may lead to a consumer behavior shift. If tariffs are as large as announced, with counter-tariffs, they could lead to supply disruptions, and high inflation, Goolsbee added further, though it does little to dent Fed rate cut expectations.
• In fact, the current market pricing indicated the possibility that the US central bank could again lower borrowing costs at the June policy meeting and deliver at least four rate cuts by the year-end. This fails to assist the USD in building on its recovery gains registered over the past two days and benefits the non-yielding Gold price.
• Traders will closely monitor minutes from the Fed's latest policy meeting, scheduled for release on Wednesday. Apart from this, the US Consumer Price Index on Thursday and the Producer Price Index on Friday should provide cues about the future rate-cut path. This, in turn, will influence the USD and the XAU/USD pair.

FXStreet calculates Gold prices in India by adapting international prices (USD/INR) to the local currency and measurement units. Prices are updated daily based on the market rates taken at the time of publication. Prices are just for reference and local rates could diverge slightly.

(An automation tool was used in creating this post.)