Global Gains vs Local Dips: Why Trump’s New Tariffs are Sending Metal Prices Skyward

On February 26, precious metals are seeing a green start to the day. Gold spot prices rose by 0.67 per cent, reaching USD 5,199.81. Similarly, silver grew by 0.64 per cent, with its spot price sitting at USD 89.67. These gains highlight a morning of modest but steady growth for investors in the metals sector. 

Indian precious metals prices showed a decline as both gold and silver traded with a negative bias. As of 10:30 AM, MCX Gold declined 0.35 per cent, reaching Rs 1,60,619, while MCX Silver declined with a sharp 1.31 per cent loss, settling at Rs 2,64,799. While prices eased significantly from their Intraday peaks, the upward trend remains clear: investors are seeking safety in uncertain times. 

Key Reasons for Rally in Gold and Silver Prices 

Gold and Silver are known for safe havens, and people grow their wealth through stocks or Bank accounts. However, when the global scenario gets messy, people's traditional investments feel risky.  

Currently, two major factors are driving this nervous energy: 

• US-Iran Nuclear Talks: Investors are on edge ahead of critical negotiations scheduled for today, February 26, in Geneva. Because the outcome of these high-pressure talks is a mystery, traders are moving money into metals to protect against potential volatility. 

• Geopolitical Tensions: Ongoing instability in the Middle East continues to support "safe-haven" demand, as bullion historically holds its value when international relations are strained. 

The Impact of Trump’s Tariffs 

A major catalyst for the recent price action is the shifting U.S. trade policy. In his recent State of the Union speech, President Donald Trump noted that while many countries wish to maintain existing deals, the U.S. is moving toward a more protectionist stance. 

On Tuesday, the U.S. implemented a temporary 10 per cent tariff on almost all imported goods. Despite this Tax having just begun, the government is already signalling an increase to 15 per cent. These tariffs create economic friction and trade war fears; when new taxes are announced, the stock market often becomes unpredictable, pushing investors toward the stability of gold and silver. 

The Currency Connection 

Global prices are a delicate balance of international markets and currency shifts. Recently, the US Dollar weakened by as much as 0.5 per cent against its peers. Since gold is priced internationally in dollars, a weaker dollar typically makes gold cheaper for holders of other currencies, further boosting demand. 

 
As per the World Gold Council (WGC), India is the world’s second-largest consumer of gold. Domestic prices are also heavily influenced by the Rupee’s performance and import duties. As most of India’s gold is imported, any change in global sentiment or tax policy ripples quickly through the local markets. 

Ultimately, as long as trade wars and diplomatic uncertainties loom, gold and silver will likely remain the preferred "storm shelter" for investors worldwide.
Disclaimer: The article is for informational purposes only and not investment advice.