On Monday, 13 October 2025, India gold prices rise amid US-China tensions after US President Donald Trump imposed 100% tariffs on Chinese imports. MCX gold futures hit a high of INR 123,680 per 10 grams, up 1.6% from the previous close, as safe-haven buying intensified.
In South Asia, India stands as the second-largest gold consumer globally. This price surge affects millions of households reliant on gold for savings and weddings, potentially straining imports and widening the current account deficit amid volatile currency markets.
Global Trade Woes Drive Safe-Haven Demand
US-China tensions escalated last week when the US announced tariffs on Chinese goods and export controls on critical software, set to take effect on 1 November. China responded by defending its curbs on rare earth elements without adding new levies on US products. These moves revived memories of past trade wars, boosting demand for non-yielding assets like gold.
Spot gold globally climbed 0.7% to USD 4,044.29 per ounce, while US gold futures rose 1.6% to USD 4,062.50. Analysts attribute the rally to geopolitical risks, central bank buying, and inflows into exchange-traded funds. Gold has gained 54% year-to-date, outpacing many assets.
Kyle Rodda, an analyst at Capital.com, said: “It’s interesting because developments in the Middle East recently had been a diminished tailwind for the gold market, but now we’ve got this reemergence of risks due to inflamed trade tensions between the U.S. and China.”
In India, the rupee’s response to these tensions remains key. The currency may need central bank support this week, as bonds track inflation data. Reserve Bank of India Governor Sanjay Malhotra noted that gold prices now serve as a barometer of global uncertainty, similar to crude oil in the past. He added that crude prices stay stable despite tensions.
India Gold Futures Peak Amid Escalating Tensions
MCX gold futures opened at INR 123,239 per 10 grams and peaked at INR 123,680, closing higher at INR 123,270, a 1.57% gain. Volume reached 2,374 lots, with open interest indicating short covering. This marks the eighth consecutive weekly gain for gold, mirroring global trends.
Spot prices in major cities followed suit. In Mumbai, 24-karat gold crossed INR 125,000 per 10 grams. Delhi saw similar rises, with prices at INR 134,993.60 per tola. Chennai and other centres reported gains of nearly 2%.
Silver also surged, with spot prices up 2% to USD 51.52 per ounce globally. In India, MCX silver traded at INR 151,000 per kilogram. Goldman Sachs expects medium-term rises in silver due to investment flows but warns of volatility.
India gold prices rise amid US-China tensions has drawn central bank attention. The RBI added less gold to reserves in 2025 than in 2024, skipping purchases in August for the second month. Yet global central banks continue accumulating, supporting prices.
Impact on Indian Economy and Consumers
India imports over 800 tonnes of gold annually, mostly for jewellery. Rising prices could dampen festive demand during Diwali and weddings, though investors may buy more via futures or ETFs. Jewellery showrooms in Ahmedabad report brisk sales despite highs, as buyers view gold as a hedge.
Economic instability and a weakening dollar fuel the surge. Experts predict prices may stay elevated through 2025, with forecasts above USD 4,000. In South Asia, neighbouring Pakistan and Bangladesh face similar import pressures, affecting regional trade.
Platinum and palladium rose 2.6% each globally, signalling broader precious metals strength. India gold futures peak amid escalating tensions reflects this trend, with analysts advising buy-on-dips strategies.
Background
US-China trade disputes date back to 2018, with tariffs impacting global supply chains. The 2025 escalation follows China’s rare earth curbs and US responses during a government shutdown starting 1 October. India, caught in crosscurrents, promotes domestic production via schemes like the Gold Monetisation Scheme, but imports dominate.
Past rallies, like in 2020 amid COVID-19, saw India gold prices rise over 30%. Current gains exceed that, driven by Fed rate cut bets. Markets price in a 25-basis-point cut in October and another in December. Fed Chair Jerome Powell speaks Tuesday, potentially influencing sentiment.
What’s Next
Traders eye Fed speeches this week for rate cues. Ongoing Gaza ceasefire talks in Egypt may ease or heighten risks. If tensions persist, India gold prices rise amid US-China tensions could push futures beyond INR 125,000. Analysts foresee volatility but upward bias.
As investors monitor developments, India gold prices rise amid US-China tensions remains a key indicator of global risk appetite.
Published in SouthAsianDesk, October 13th, 2025
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