Bullion at a New Peak: Why Gold and Silver Prices May Continue to Rise

Gold and Silver prices surged to fresh record highs on Monday, both globally and in India, as investors shifted funds into safe-haven assets amid rising global tensions and renewed concerns over Trade Tariffs.

The latest trigger for the rally was a revival of trade worries after U.S. President Donald Trump reiterated his intention to raise tariffs on European nations, unsettling financial markets.

Precious metals, traditionally seen as a hedge during periods of uncertainty, witnessed a sharp rise in demand as investors sought protection from growing geopolitical and economic risks.

India’s Gold and Silver Prices

In the domestic market, gold and silver prices continued their strong upward trajectory, hovering close to record levels.

According to India bullion rates, the price of ten grams of gold stood at Rs 145,030. The yellow metal recorded a single-session gain of 1.360%, rising by Rs 1,940. Gold prices in India have been on a sustained rally in recent weeks, supported by global cues and steady safe-haven buying.

Silver posted an even sharper move. Prices jumped by Rs 11,100, or 3.850%, to Rs 299,390 per kilogram. During the trading session, silver briefly approached the Rs 3 lakh per kilogram mark, underscoring the strength of its current momentum.

Global Change in Price

In international markets, gold prices moved decisively higher as risk appetite weakened. Spot gold rose 1.6% to USD 4,670.01 per ounce in early Asian trade, after touching an all-time high of USD 4,689.39 earlier in the session.

U.S. gold futures for February delivery also climbed, gaining 1.8% to trade at USD 4,677.

Silver outperformed gold in percentage terms. Spot silver surged 4.4% to USD 93.85 per ounce after previously hitting a record high of USD 94.08. The sharp rise reflects growing interest in silver both as an industrial metal and as a store of value.

The broader rally was supported by a risk-averse tone across global markets. The U.S. dollar and U.S. stock futures weakened as investors grew cautious following fresh tariff warnings. Meanwhile, traditional safe-haven currencies such as the Japanese yen and the Swiss franc recorded gains.

Safe-Haven Demand Boosted by Tariff Tussle

Escalating trade tensions were the primary driver behind the surge in gold and silver prices. Over the weekend, Donald Trump said he would raise tariffs on European allies in stages unless the United States is allowed to purchase Greenland, heightening concerns over global trade and economic stability.

Following talks on Sunday, European Union ambassadors broadly agreed to intensify diplomatic efforts to prevent the imposition of the duties. According to EU diplomats, contingency plans for retaliatory measures are also being prepared should the tariffs go ahead.

These developments have increased anxiety in financial markets, prompting investors to shift capital toward assets considered safer during periods of global stress.

Concerns About the Economy and Interest Rates

Expectations around interest rates have also supported gold prices. Michelle Bowman, Vice Chair for Supervision at the U.S. Federal Reserve, said the labour market remains fragile and could weaken quickly.

She added that the central bank should be prepared to cut interest rates again if conditions warrant.

Gold, which does not offer interest, typically performs well in low-rate environments. As returns on bonds and savings decline, gold becomes a more attractive investment option.

Concerns surrounding china’s economy added to the cautious mood. Economic growth in China is expected to have slowed to a three-year low in the fourth quarter due to weak domestic demand. Ongoing trade tensions and deeper structural challenges continue to pose risks.

Physical Demand and ETF Holdings

Investment demand for gold remained strong. Holdings in SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, rose 1.01% to 1,085.67 metric tonnes on Friday, signalling continued accumulation by large investors.

Despite prices hovering near all-time highs, physical demand in India remained subdued last week as elevated prices dampened retail buying interest. In China, however, demand was steady as the market moves toward the Lunar New Year period.

Among other precious metals, platinum advanced 1.9% to USD 2,373.08 per ounce, while palladium gained 0.5% to USD 1,809 per ounce.

Why Prices May Remain High

Gold and silver prices are likely to stay elevated as long as global uncertainty persists.

Ongoing trade tensions, concerns over economic growth, and expectations of lower interest rates are creating a supportive environment for precious metals.

If tariff disputes intensify further or signs of an economic slowdown emerge, more investors may turn to gold and silver for safety.

While high prices could restrain retail demand in markets such as India, strong global cues and sustained safe-haven interest suggest that bullion prices may remain firm in the near term.