Trump's midterm setback fuels gold rally in Keralam; prices surge by ₹2,320/sovereign in a day

Gold prices in Keralam staged a sharp rally on Wednesday, surging by ₹2,320 per sovereign in a single day to reach ₹1,04,720, as a weaker US dollar and growing global uncertainty following President Donald Trump's midterm setback boosted demand for the precious metal.

The price of gold rose by another ₹2,120 per sovereign in the afternoon, taking the rate to ₹1,04,720. It had already risen by ₹200 in the morning. The latest rally comes after gold prices appeared poised to fall below the ₹1 lakh mark.

The price of 22-carat gold now stands at ₹13,090 per gram, following an afternoon increase of ₹265.

The price of 18-carat gold rose by ₹225 to ₹10,720 per gram. Meanwhile, 14-carat and nine-carat gold were trading at ₹8,380 and ₹5,405 per gram, respectively.

Silver prices remained unchanged at ₹200 per gram, according to the All Kerala Gold and Silver Merchants Association, which determines the daily bullion rates in the state.

Weaker dollar, US political uncertainty lift gold
Gold prices also rallied in international markets, with spot gold climbing 2.68 per cent to $4,035.93 per ounce.

The US dollar weakened following the Democrats' decisive victory in the midterm elections, while global stocks also declined. The Democratic sweep fuelled concerns that the party could disrupt the data-centre expansion that has driven investments in artificial intelligence and potentially affect technology spending.

A weaker dollar makes gold, which is priced in the US currency, cheaper for buyers using other currencies, thereby supporting demand.

Meanwhile, growing demand for US Treasury bonds amid political uncertainty pushed bond yields lower, adding to the pressure on the dollar. The dollar index, which measures the US currency against a basket of six major currencies, fell to a multi-month low.

Analysts said concerns over the direction of the Trump administration following the Republican setback were also supporting demand for gold as a safe-haven asset.
"The demand for protection against a potentially more unpredictable and confrontational Trump administration looks to be providing a compelling backdrop for gold buyers," said Chris Weston, head of research at Pepperstone.