Gold Prices Scale Fresh All Time High, Silver Jumps 4% As Renewed US-China Trade Tensions Trigger Safe Haven Demand

Gold prices surged to a fresh all-time high on October 13 as renewed trade tensions between the United States and China spurred investors to seek refuge in safe-haven assets. Silver prices also surged more than 4 per cent, tracking the rally in the yellow metal.

On the Multi Commodity Exchange (MCX), gold futures climbed to a record Rs 1,23,977 per 10 grams, up 2.15 per cent, or Rs 2,613. Silver futures, on the other hand, advanced as much as 4.28 per cent, or Rs 6,274 to its day high of Rs 1,52,740 per 1 kg.

On the Comex, Gold futures touched a record high of $4,099.40 per ounce, up 2.47 per cent, while Silver futures hit an intraday high of $49.77 per ounce, up 5.34 per cent.

US-China Trade Tensions Spur Safe Haven Demand

The latest rally in gold prices came after US President Donald Trump warned Beijing that Washington would impose an additional 100 per cent tariff on Chinese goods, on top of the existing 30 per cent tariff. He also announced plans to tighten export controls on critical software developed by American firms.

Trump justified the additional tariff as a response to Beijing’s new restrictions on rare earth materials, a key component in electronics and defense manufacturing. This escalated the trade tensions between the world’s two largest economies, prompting investors to turn towards safe haven assets.

Kaynat Chainwala, AVP, Commodity Research at Kotak Securities, noted, the rally came despite Trump’s attempt to calm markets by stating that trade relations with China “will all be fine,” signaling a willingness to negotiate and meet with his Chinese counterpart Xi Jinping.

Tejas Shigrekar, Chief Technical Research Analyst – Commodities and Currencies at Angel One, added that Gold’s rally is also being fuelled by expectations that the US Federal Reserve will soon start easing monetary policy. “The US Fed is expected to cut rates, which could pull down bond yields and make non-yielding assets like gold more attractive,” he said.

Shigrekar added that domestic demand has also hit a seasonal peak. “Festive buying ahead of Diwali and the wedding season has lifted retail demand sharply, pushing gold to record highs in major cities,” he said.

Industrial Demand, Supply Shortage Push Silver Prices Higher

While Silver has its own fundamental drivers behind the rally, investors also appear to be turning to the white metal as a safe haven, much like gold.

Apart from its safe haven appeal, Shigrekar explained that the industrial demand for silver is rising, led by its growing use in solar panels, electric vehicles, 5G networks, and artificial intelligence (AI) hardware. “Silver has become a strategic metal with no viable substitutes,” he said, adding that physical shortages have pushed premiums to over 12 per cent above global benchmark rates.

“Silver has been the standout performer,” Chainwala said, adding that spot prices have surged past $51 an ounce for the first time in over four decades amid tightening physical supply and rising lease rates.

Gold, Silver Prices Outlook

With gold and silver prices hitting new highs almost every day, investors are left debating whether to ride the momentum or wait for a correction.

Gold traders and investors will be tracking how strong domestic festive demand and high physical market premiums will balance against global factors. Key macroeconomic data releases and political developments in the US are also expected to influence prices. Investors will also keep a track on comments from US Federal Reserve Chair Jerome Powell due on October 14 for further guidance on monetary policy, which is likely to have an impact on gold prices.

On Silver prices, Chainwala said, it may may remain supported ahead of the conclusion of the US administration’s Section 232 investigation into critical minerals, including silver, platinum, and palladium, expected by mid-October. “If no new tariffs are announced, some supply tightness concerns may ease, potentially leading to a modest pullback in prices,” she said.

What Should Investors Do

Shrigrekar advises to hold existing positions in both the metals and avoid fresh lump-sum entries at elevated levels. For new investors, he advised a staggered entry via systematic investment plans (SIPs) or partial allocation. “This allows participation without overexposure to peak valuations. Traders may consider tight trailing stop-losses or hedging via options to protect gains,” he advised.

Sharing her trading strategy, Chainwala maintained a bullish view on both the precious metals. She advised aggressive investors to initiate long positions in gold at current levels and add on dips near Rs 1,20,000, with a stop loss at Rs 1,16,500. Upside targets, she said, lie at Rs1,27,000 and Rs 1,31,000.

For silver, she recommends buying at current levels or on declines toward Rs 1,44,000, with a stop loss at Rs 1,40,000. Profit booking, she added, can be considered near resistance levels of Rs 1,61,000 and Rs 1,65,500.