Why Did Gold Prices Surge Over Rs 1,100 This Week Amid US Tariff Deal Uncertainties?
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Synopsis
In a week marked by uncertainty over a US tariff deal, gold and silver prices saw significant increases. Gold prices jumped by Rs 1,135, while silver surged over Rs 2,000, reflecting market dynamics and investment shifts. This article explores the implications for investors and the potential for silver to outshine gold moving forward.
Key Takeaways
- Gold prices increased by Rs 1,135 this week.
- Silver surged over Rs 2,000 amid market uncertainties.
- The gold-silver ratio has influenced investment shifts.
- Silver's diverse industrial applications provide potential for future growth.
- Market sentiment is boosted by declining silver inventories.
New Delhi, July 5 (NationPress) Gold prices jumped by Rs 1,135, while silver prices increased by over Rs 2,000 this week due to the uncertainties surrounding the US tariff deal deadline set for July 9, along with a drop in the US dollar index.
As of June 30, the price of 24-carat gold stood at Rs 95,576 per 10 grams, closing at Rs 97,021 on Friday, according to IBJA data. In the same vein, the 22-carat gold price rose by Rs 1,131, reaching Rs 96,633 compared to Monday's rate of Rs 95,502 per 10 grams.
In addition, silver prices settled at Rs 107,580 per kg, marking an increase of Rs 2,070 per kg from the June evening closing price of Rs 105,510 per kg. Notably, silver reached an all-time high of Rs 1,09,550 per kg on June 18.
Both precious metals have demonstrated commendable returns in the first half of the calendar year, with gold showing a remarkable 26 percent increase, outperforming silver, which rose by 22 percent during the same timeframe.
Interestingly, in June alone, silver significantly outperformed gold due to a decrease in the gold-silver ratio.
"Silver outperformed gold in June, gaining 9.41 percent in international markets, whereas gold saw a modest rise of 0.4 percent. This was influenced by the decline in the gold-silver ratio from over 100 to approximately 92-93, prompting investors to shift towards silver, particularly with the critical $35/ounce mark triggering momentum and technical buying," explained Prathamesh Mallya, DVP-Research, Non-Agri Commodities and Currencies, Angel One Ltd.
Moreover, silver has faced a supply deficit for five consecutive years, and dwindling inventories alongside record ETF inflows exceeding $1.6 billion in June have positively impacted market sentiment for the metal.
Given silver's diverse applications across various industries, including automobiles and clean energy, the analyst perceives significant potential for silver in the future.
"Looking ahead, silver could outshine gold, as gold serves primarily as a safe asset, while silver, being a precious metal, also possesses industrial value," Mallya stated.
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Point of View
I believe that the recent surge in gold and silver prices reflects a broader trend influenced by market sentiments and geopolitical uncertainty. Our analysis indicates potential opportunities for investors, particularly in silver, which may continue to rise given its industrial applications and supply constraints. NationPress remains committed to providing insightful analysis and updates on such critical financial developments.
NationPress
20/07/2025
Frequently Asked Questions
Why did gold prices increase this week?
Gold prices rose due to uncertainties surrounding the US tariff deal deadline and a declining US dollar index.
What factors contributed to silver's price surge?
Silver prices surged due to supply deficits, record ETF inflows, and increasing industrial demand.
How much did gold prices rise this week?
Gold prices surged by Rs 1,135 this week.
Is silver expected to outperform gold?
Analysts predict that silver may outperform gold due to its dual role as both a precious and industrial metal.
What is the significance of the gold-silver ratio?
The gold-silver ratio indicates investor preference; a decreasing ratio often leads to increased investment in silver.
