After hitting record highs earlier this month, precious metal markets have entered a period of intense volatility following sweeping tariff announcements by U.S. President Donald Trump on what he called “Liberation Day” (April 2). The new trade regime has triggered significant market reactions, affecting everything from hedge fund liquidity to the global demand outlook for industrial metals.
Gold: From Record Highs to Rapid Sell-Off
Gold prices surged to a new all-time high of $3,200/oz (approx. ₹91,400/10g) last week after the U.S. administration imposed a 10% baseline tariff on all imports, effective April 5. Key allies like Saudi Arabia, Australia, and the UK are expected to remain under this base rate. However, countries like China, India, Japan, and the EU face much steeper levies—ranging from 20% to 54%.
Following the announcement, hedge funds experienced the largest margin calls since the COVID-19 pandemic, leading to a rapid unwinding of positions. Gold dropped below $3,000/oz (approx. ₹88,000/10g) in just two days of trading.
The Federal Reserve's cautious tone further added to the uncertainty, with Chair Jerome Powell warning that rising tariffs could slow growth while increasing inflation—casting doubt on future rate cuts.
Short-Term Outlook:
If gold remains below $3,000, further downside to $2,900 (approx. ₹85,000/10g) is possible.
If it reclaims key levels, a consolidation between $3,000 and $3,100 (₹88,000–₹90,000) is likely in the near term.
Silver: 20% Sell-Off Amid Industrial Demand Concerns
Silver, which had been trading around $35/oz (₹100,200/kg), witnessed a sharp correction to $28/oz (₹86,500/kg)—a 20% drop over three trading sessions. The sharp decline was driven by recession fears, with investors worried about slowing industrial demand in the wake of rising global tariffs.
With China announcing a 34% retaliatory tariff on all U.S. imports effective April 10, market sentiment around global trade and manufacturing has soured considerably.
As a result, the Gold-to-Silver Ratio has surged past 100, and for the first time in recent memory, gold (per 10g) and silver (per kg) are trading at near parity in rupee terms.
Silver Outlook:
While the drop has been steep, silver is expected to stabilize around $30 (₹92,500/kg).
The supply-demand imbalance in industrial metals could support a rebound in prices.
Macro Outlook: What Lies Ahead?
The International Monetary Fund (IMF) and Fitch Ratings have warned of serious consequences if tariff escalation continues. Fitch has downgraded its U.S. GDP outlook for 2025, citing risks from higher consumer prices and reduced corporate profitability.
Investors are now closely watching how other countries respond to U.S. tariffs—and whether the U.S. administration signals a willingness to negotiate. If tensions ease, we could see a stronger U.S. dollar and weaker precious metal prices. On the other hand, prolonged trade conflict could push investors back into safe-haven assets like gold and silver.
Key Takeaways for Investors on eBullion.in
- Gold: Remains volatile but supported by geopolitical tensions. Long-term holders may look for re-entry around ₹85,000–₹88,000 levels.
- Silver: A 20% correction could present a value-buying opportunity. Stabilization near ₹92,500/kg could signal a potential bottom.
- Gold-to-Silver Ratio: Above 100 — suggesting silver is currently undervalued relative to gold.
For live rates, detailed charts, and secure digital gold & silver purchases, visit eBullion.in.
Disclaimer: This article reflects the opinions of the author and is for informational purposes only. It should not be considered financial or investment advice. Readers are encouraged to consult with their financial advisors before making investment decisions.
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