Gold: Safe-haven buying balances out reduced demand from India – Commerzbank

Gold Prices Steady Amid Global Uncertainty

According to Commerzbank analysts Thu Lan Nguyen and Carsten Fritsch, gold has found stability near USD 5,200 per troy ounce. Ongoing political tensions, including concerns over US tariffs and the conflict between the US and Iran, have helped maintain gold’s value. Meanwhile, increased investments in gold ETFs highlight its appeal as a safe-haven asset, though elevated prices are dampening physical purchases in India.

Geopolitical Tensions and Tariff Concerns Boost Gold

Gold prices have recently settled around USD 5,200 per troy ounce, with previous volatility easing. The market continues to be influenced by geopolitical events such as the US-Iran standoff and the ongoing war in Ukraine.

Fresh uncertainty surrounding US trade policy has emerged after a recent Supreme Court decision. While a major tariff crisis has been avoided for now, investors are seeking safety in gold, as evidenced by gold ETF inflows totaling 22 tons so far this week, according to Bloomberg data. This trend reflects gold’s enduring reputation as a safe haven during turbulent times.

There is still no clear plan from the US government regarding the long-term replacement of reciprocal tariffs. Some trade partners, including the European Union, worry that future tariffs could be more burdensome than previous agreements.

Such uncertainties could reignite tensions among major economies, while the risk of further escalation in the US-Iran conflict is expected to keep supporting gold prices.

High Prices Impact Indian Gold Demand

Elevated gold prices are discouraging physical buying in India. This week, Indian traders were forced to offer discounts of up to USD 65 per troy ounce compared to official prices—a situation not seen in the past ten months.

(This report was produced with the assistance of artificial intelligence and reviewed by an editor.)