Moneycontrol Pro Panorama | When in doubt, buy gold

Amid simmering geopolitical tensions, investors are expected to take refuge in gold.

Dear Reader,

The risk-off trade triggered by US President Donald Trump’s tariff threats on Canada and Mexico has sent gold prices to record highs. Cryptocurrency Bitcoin plunged. Crude oil prices extended declines on Tuesday. The delay in imposition of tariffs on Canada and Mexico by 30 days has brought relief for stock markets in Asia, including India.

However, matters are far from settled. In fact, China is reportedly preparing to counter US tariffs by imposing additional taxes on imports from North America. The European Union, which is also on Trump’s tariff target list, seems to be preparing a potential response.

As things stand, the stand-off between the US and other major countries across the world is likely to persist for some time, infusing uncertainty into the global markets. Currencies of US’s trading partners are weakening. Read Aparna Iyer’s piece to find out on how tariffs make the US Dollar supreme and the implications for emerging economies such as India.

The threat of inflation, a slowdown in the global economy and the impact on corporate earnings are driving investors to gold, long perceived to be a store of value. Global inflows into gold ETFs saw the first positive annual rise in inflows in four years in 2024. As the global economy has faced renewed headwinds, gold generated handsome returns on a one-year basis, outperforming global stocks and emerging markets by a notable margin.

Amid simmering geopolitical tensions, investors are expected to take refuge in gold. In fact, gold did fare better than other asset classes during past episodes of geopolitical uncertainties and elevated inflation, shows an analysis by World Gold Council (WGC). “Meanwhile, volatility in equities and bonds, as well as potential weakness in non-US currencies, could provide additional boosts to investment demand for gold,” add analysts at WGC.

While that warrants a dose of gold in one’s portfolio, Sky Gold, a supplier of gold jewellery to leading retailers in India, is seeing strong growth on addition of new customers. You can read our Research Team’s analysis of the company’s results here. The stock is up 5 percent in Tuesday afternoon trade. 

Investing insights from our research team

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Pro Economic Tracker: Labour participation, consumer sentiment decline, power consumption improves

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Will India’s image as a trade ally get a lift after Budget 2025?

Budget strives to rev up EV ecosystem, but some key measures missing

China’s exporters to step up offshoring to beat Donald Trump’s tariffs (republished from the FT)

Hamilton to Trump: America’s repeated dalliances with tariffs

Can the Supreme Court become an interim Parliament?

Salute the understated commitment to fiscal rectitude which enables a favourable macroeconomic environment

To leverage AI, India needs a robust regulatory mechanism

A budget that scores on four of five essential criteria

Markets

Why markets will remain flat and what could trigger growth ahead? Neelkanth Mishra weighs in

Tech and Startups

After a 'lacklustre Budget', crypto startups pin hopes on FinMin’s delayed discussion paper

Technical Picks: INDUSINDBANK, KFINTECH, TATAPOWER. 

R Sree Ram Moneycontrol Pro