CHENNAI: Gold prices rose more than 1% in the domestic futures market on Tuesday morning, reflecting positive global cues. The MCX Gold June 5 contract was up 1.31% at ₹95,885 per 10 grams at the start, briefly touching ₹96,000 earlier in the session.
Internationally, gold prices reached a two-week high, driven by renewed safe-haven demand amid investor concerns over US President Donald Trump's new tariff plans and anticipation of the upcoming Federal Reserve policy meeting. Spot gold increased by 0.7% to $3,357.63 an ounce, while US gold futures rose 1.3% to $3,366.10.
Trump's unexpected announcement of a 100% tariff on foreign films, along with a forthcoming plan to impose pharmaceutical tariffs, has heightened market volatility.
Investors are closely watching the Fed's interest rate decision and Chair Jerome Powell's comments scheduled for Wednesday for guidance on future policy moves. The Federal Reserve is widely expected to maintain the current interest rate range of 4.25% to 4.50%.
Analysts suggest that dovish signals from the Fed could bolster gold’s rally. Goldman Sachs forecasts potential rate cuts in July, September, and October. As a non-yielding asset, gold tends to perform well in low-interest-rate environments, offering protection against economic and political uncertainty.
Recent data shows that the US GDP shrank at an annual rate of 0.3% in the first quarter of 2025. Additionally, the US manufacturing sector contracted for the second month in a row in April, with the ISM Manufacturing PMI falling to a five-month low of 48.7, down from 49.0 in March.