Gold prices cross record high of Rs 60,000 per sovereign in Kerala

Gold prices in Kerala hit an all-time high of Rs 60,200 per sovereign this month on Wednesday, with the price of 22K gold increasing from Rs 7,450 to Rs 7,525 per gram. On October 31, 2024, gold prices in Kerala reached Rs 59,640 per sovereign and Rs 7,455 per gram, marking the second-highest record. The third-highest price of Rs 59,600 per sovereign and Rs 7,450 per gram was recorded on January 17, 20 and 21 in 2025.

The surge in local prices reflects global trends, where gold climbed to an 11-week high, buoyed by a weaker dollar and heightened uncertainty surrounding US President Donald Trump’s trade policies. Spot gold rose 0.1% to $2,748.58 per ounce earlier in the day, after reaching its highest level since November 5. US gold futures also gained 0.1%, reaching $2,763.40.

A weaker dollar has made gold more attractive to foreign buyers, further boosting its appeal. Gold is often seen as a safe-haven investment during periods of economic and geopolitical uncertainty. Trump's decision to hold back on imposing trade barriers during his first day in office pushed the dollar lower, adding to gold’s upward momentum.

The US president’s announcement of potential tariffs on European Union goods and a proposed 10% tariff on imports from China starting February 1 have also increased demand for the precious metal. However, gold’s role as an inflation hedge may face challenges if Trump’s policies, considered inflationary, lead the Federal Reserve to maintain higher interest rates for an extended period.

The Federal Reserve is expected to hold its benchmark interest rate steady in the range of 4.25% to 4.50% during its upcoming policy meeting on January 28-29. Higher interest rates typically reduce the appeal of non-yielding assets like gold.

Meanwhile, the world’s largest gold-backed exchange-traded fund, SPDR Gold Trust, reported a decline in its holdings, which fell by 0.85% to 871.66 tonnes on Tuesday from 879.12 tonnes on Friday.

Other precious metals also showed mixed performance in the global markets. Spot silver remained flat at $30.85 per ounce, palladium inched up by 0.1% to $958.11, and platinum steadied at $944.05.