<p>Bengaluru: With New Delhi and Washington moving to ease trade frictions and signing an interim trade agreement that slashes US tariffs on Indian goods to 18% from 50%, much attention has centred on manufacturing, textiles and technology. But in India — where gold is as much a cultural cornerstone as a commodity — another question arises: what does the thaw mean for bullion?</p>.<p>Gold is a global commodity priced in dollars, traded across continents, and influenced far beyond bilateral tariffs. </p><p>According to analysts, the consequences of easing trade tensions, therefore, are unlikely to be direct or structural. Instead, they filter through subtler channels — investor sentiment, currency movements, and broader economic confidence. Tariff reductions may marginally soften gold demand in the near term by easing uncertainty, supporting the rupee and lowering import costs. Yet the broader price trajectory will continue to hinge on US monetary policy, geopolitical risks and central bank buying.</p>.<p><strong>Record-breaking run</strong></p>.<p>The yellow metal has been on a remarkable surge over the past year, punctuated by brief consolidations. According to the World Gold Council’s (WGC) Full-Year 2025 Gold Demand Trends report, total gold demand reached a new high of 5,002 tonnes, valued at $555 billion. Global investment demand climbed to 2,175 tonnes, the primary driver of gold’s rally. Investors poured 801 tonnes into gold ETFs, while bar and coin demand reached 1,374 tonnes, worth $154 billion. China (+28% YoY) and India (+17% YoY) together accounted for more than half of global bar and coin demand.</p>.<p>“With economic and geopolitical instability showing little sign of retreat in 2026, momentum from last year’s strong gold demand is likely to persist,” says Louise Street, Senior Markets Analyst at WGC, noting gold crossed $5,000 per ounce early this year.</p>.<p>“Persistent geopolitical uncertainty, growing unease around fiscal discipline in developed markets, and fears of long-term currency debasement kept gold firmly stable. Central bank buying and strong ETF inflows provided additional structural support,” echoes Mirae Asset.</p>.<p><strong>Safe-haven bid amid trade tensions</strong></p>.<p>Gold’s recent behaviour illustrates its sensitivity to trade shocks. When the Trump administration imposed 50% tariffs on Indian goods last August, uncertainty spiked and investors sought refuge in defensive assets.</p>.<p>“Gold reaffirmed its role as a safe-haven asset following the US announcement of 50% tariffs on Indian goods,” says Saumil Gandhi, Senior Analyst — Commodities, HDFC Securities. “In the first two months, domestic gold prices rose nearly 15%. From the August 7 tariff announcement, prices surged close to 40%.”</p>.<p>By January 29, gold had hit all-time highs in both dollar and rupee terms. International prices climbed past $5,500 per ounce, while on the Multi-Commodity Exchange (MCX), 24-carat gold approached Rs 1.92 lakh per 10 grams.</p>.<p>Historical parallels underscore the pattern. During US-China trade tensions in 2018-19, gold rose from roughly $1,200 per ounce in August 2018 to around $1,550-1,560 by September 2019 — a 30% gain. When trade optimism returned late 2019, prices pulled back to $1,445-1,480 per ounce. Gold thrives on uncertainty; as clarity returns, the “insurance premium” embedded in its price diminishes.</p>.<p><strong>The New Deal and market reaction</strong></p>.<p>On February 2, 2026, US President Donald Trump announced a trade deal with India, cutting tariffs to 18%. Domestic gold prices climbed to Rs 1.57 lakh per 10 grams the following session.</p>.<p>But as trade talks progressed positively and the dollar strengthened, prices briefly eased. On February 12-13, gold fell about 2.8% to near one-week lows (about $4,938 per ounce) after strong US jobs data and technical selling.</p>.<p>“Gold has fallen recently in short-term periods mainly because of profit-taking after record rallies, a stronger US dollar and positive macro data,” analysts note. However, the broader trend over 2025-early 2026 still shows significantly higher prices overall, despite periodic pullbacks.</p>.<p>“Short term, reduced volatility and a stronger Indian Rupee could cap domestic gold prices,” says Renisha Chainani, Head of Research at Augmont. “Over the medium to long term, structural drivers — US fiscal stress, rate cuts, geopolitical realignments, and sustained investment demand — are likely to keep gold well-supported, with corrections attracting strategic buying.”</p>.<p>Rahul Kalantri, VP — Commodities, Mehta Equities Ltd, sees limited direct impact from the trade pact. “Gold is a global commodity, so most of the impact will be indirect. Easing trade tensions can improve risk sentiment and reduce safe-haven demand, which may lower its premium and exert some downward pressure in the medium term.”</p>.<p><strong>Domestic angle</strong></p>.<p>Domestic dynamics, particularly in the gems and jewellery sector, may move differently. Lower tariffs reduce costs for US importers, potentially reviving Indian gold and jewellery exports and supporting manufacturing.</p>.<p>“With tariffs lowered, US importers face lower costs, which can help revive Indian gold and jewellery exports, lifting physical demand,” Kalantri states, noting that a stronger rupee typically makes imports cheaper locally.</p>.<p>The US is India’s largest market for gems and jewellery, accounting for 31% ($9.23 billion) of industry exports. “Tariff cuts lower costs for US importers, provide immense relief to diamond jewellery manufacturers, boost competitiveness and revive demand,” says Kirit Bhansali, Chairman, The Gem and Jewellery Export Promotion Council (GJEPC).</p>.<p>According to Gandhi, the rollback is positive for an industry under pressure from high tariffs and record gold prices that dampened retail demand.</p>.<p>Trade agreements rarely move gold in a straight line. The metal responds to liquidity, macroeconomic signals and investor psychology, rather than tariff schedules. When trade barriers fall and currencies stabilise, gold’s shine in financial markets may dim modestly. Yet in India’s bazaars and export workshops, lower tariffs and revived shipments could support physical demand, reinforcing gold’s dual role — investment and cultural core.</p>
<p>Bengaluru: With New Delhi and Washington moving to ease trade frictions and signing an interim trade agreement that slashes US tariffs on Indian goods to 18% from 50%, much attention has centred on manufacturing, textiles and technology. But in India — where gold is as much a cultural cornerstone as a commodity — another question arises: what does the thaw mean for bullion?</p>.<p>Gold is a global commodity priced in dollars, traded across continents, and influenced far beyond bilateral tariffs. </p><p>According to analysts, the consequences of easing trade tensions, therefore, are unlikely to be direct or structural. Instead, they filter through subtler channels — investor sentiment, currency movements, and broader economic confidence. Tariff reductions may marginally soften gold demand in the near term by easing uncertainty, supporting the rupee and lowering import costs. Yet the broader price trajectory will continue to hinge on US monetary policy, geopolitical risks and central bank buying.</p>.<p><strong>Record-breaking run</strong></p>.<p>The yellow metal has been on a remarkable surge over the past year, punctuated by brief consolidations. According to the World Gold Council’s (WGC) Full-Year 2025 Gold Demand Trends report, total gold demand reached a new high of 5,002 tonnes, valued at $555 billion. Global investment demand climbed to 2,175 tonnes, the primary driver of gold’s rally. Investors poured 801 tonnes into gold ETFs, while bar and coin demand reached 1,374 tonnes, worth $154 billion. China (+28% YoY) and India (+17% YoY) together accounted for more than half of global bar and coin demand.</p>.<p>“With economic and geopolitical instability showing little sign of retreat in 2026, momentum from last year’s strong gold demand is likely to persist,” says Louise Street, Senior Markets Analyst at WGC, noting gold crossed $5,000 per ounce early this year.</p>.<p>“Persistent geopolitical uncertainty, growing unease around fiscal discipline in developed markets, and fears of long-term currency debasement kept gold firmly stable. Central bank buying and strong ETF inflows provided additional structural support,” echoes Mirae Asset.</p>.<p><strong>Safe-haven bid amid trade tensions</strong></p>.<p>Gold’s recent behaviour illustrates its sensitivity to trade shocks. When the Trump administration imposed 50% tariffs on Indian goods last August, uncertainty spiked and investors sought refuge in defensive assets.</p>.<p>“Gold reaffirmed its role as a safe-haven asset following the US announcement of 50% tariffs on Indian goods,” says Saumil Gandhi, Senior Analyst — Commodities, HDFC Securities. “In the first two months, domestic gold prices rose nearly 15%. From the August 7 tariff announcement, prices surged close to 40%.”</p>.<p>By January 29, gold had hit all-time highs in both dollar and rupee terms. International prices climbed past $5,500 per ounce, while on the Multi-Commodity Exchange (MCX), 24-carat gold approached Rs 1.92 lakh per 10 grams.</p>.<p>Historical parallels underscore the pattern. During US-China trade tensions in 2018-19, gold rose from roughly $1,200 per ounce in August 2018 to around $1,550-1,560 by September 2019 — a 30% gain. When trade optimism returned late 2019, prices pulled back to $1,445-1,480 per ounce. Gold thrives on uncertainty; as clarity returns, the “insurance premium” embedded in its price diminishes.</p>.<p><strong>The New Deal and market reaction</strong></p>.<p>On February 2, 2026, US President Donald Trump announced a trade deal with India, cutting tariffs to 18%. Domestic gold prices climbed to Rs 1.57 lakh per 10 grams the following session.</p>.<p>But as trade talks progressed positively and the dollar strengthened, prices briefly eased. On February 12-13, gold fell about 2.8% to near one-week lows (about $4,938 per ounce) after strong US jobs data and technical selling.</p>.<p>“Gold has fallen recently in short-term periods mainly because of profit-taking after record rallies, a stronger US dollar and positive macro data,” analysts note. However, the broader trend over 2025-early 2026 still shows significantly higher prices overall, despite periodic pullbacks.</p>.<p>“Short term, reduced volatility and a stronger Indian Rupee could cap domestic gold prices,” says Renisha Chainani, Head of Research at Augmont. “Over the medium to long term, structural drivers — US fiscal stress, rate cuts, geopolitical realignments, and sustained investment demand — are likely to keep gold well-supported, with corrections attracting strategic buying.”</p>.<p>Rahul Kalantri, VP — Commodities, Mehta Equities Ltd, sees limited direct impact from the trade pact. “Gold is a global commodity, so most of the impact will be indirect. Easing trade tensions can improve risk sentiment and reduce safe-haven demand, which may lower its premium and exert some downward pressure in the medium term.”</p>.<p><strong>Domestic angle</strong></p>.<p>Domestic dynamics, particularly in the gems and jewellery sector, may move differently. Lower tariffs reduce costs for US importers, potentially reviving Indian gold and jewellery exports and supporting manufacturing.</p>.<p>“With tariffs lowered, US importers face lower costs, which can help revive Indian gold and jewellery exports, lifting physical demand,” Kalantri states, noting that a stronger rupee typically makes imports cheaper locally.</p>.<p>The US is India’s largest market for gems and jewellery, accounting for 31% ($9.23 billion) of industry exports. “Tariff cuts lower costs for US importers, provide immense relief to diamond jewellery manufacturers, boost competitiveness and revive demand,” says Kirit Bhansali, Chairman, The Gem and Jewellery Export Promotion Council (GJEPC).</p>.<p>According to Gandhi, the rollback is positive for an industry under pressure from high tariffs and record gold prices that dampened retail demand.</p>.<p>Trade agreements rarely move gold in a straight line. The metal responds to liquidity, macroeconomic signals and investor psychology, rather than tariff schedules. When trade barriers fall and currencies stabilise, gold’s shine in financial markets may dim modestly. Yet in India’s bazaars and export workshops, lower tariffs and revived shipments could support physical demand, reinforcing gold’s dual role — investment and cultural core.</p>
