Gold price surge April 2025 amid U.S.-India tariff clash

What began as a broader U.S. tariff campaign aimed at reducing its trade deficit escalated dramatically when India was included in a revised list of nations facing steep import duties. The imposition of a 15% tariff on Indian gold jewelry and bullion exports to the U.S., and India’s reciprocal tariffs on American goods, triggered global uncertainty and sparked a rush toward gold as a safe haven.

Spot gold prices quickly surged past $3,100 per ounce, touching highs of $3,500+ by mid-April as the U.S. dollar weakened and equity markets faltered. Central banks in Asia, already on a gold-buying spree, accelerated their purchases. Investors viewed the tit-for-tat tariffs as a sign of worsening global trade conditions and hedged their positions accordingly.

Western markets saw a classic flight-to-safety reaction, while Eastern economies experienced price-sensitive shifts, particularly in retail demand. In India, one of the largest gold consumers globally, retail jewelry sales temporarily dipped due to rising prices, even as institutional and central bank buying remained strong. The result was a historic global rally anchored by escalating policy tensions.

Impact of Trump’s Tariffs on Gold Prices Globally

President Trump’s revised tariff framework, introduced in April 2025, hit key trade partners including China, Germany, and notably, India. The U.S. cited long-standing trade imbalances and intellectual property disputes, applying tariffs ranging from 10% to 15% on a variety of goods. The tariff on Indian gold and jewelry exports was especially disruptive, given India’s dominant position in the global gold supply chain.

India’s countermeasures included higher import duties on U.S. electronics and agricultural products, igniting broader fears of supply chain disruption. Gold markets reacted almost instantly. The uncertainty surrounding global trade flows made gold the asset of choice for investors seeking stability.

Prices climbed to over $3,148.88 per ounce, with analysts forecasting continued bullishness amid the geopolitical friction. Central banks in India, China, and Russia increased their gold holdings, while investment firms revised their 2025 price forecasts to remain above $3,100 through year-end. The tariffs reinforced gold’s dual value, as both a geopolitical hedge and a shield against currency volatility.

Gold Price Movements in India Over the Last Three Weeks

India’s domestic market mirrored global trends, with prices rising steadily across April and May:

April 29, 2025: ₹95,316 per 10g (MCX)
May 6, 2025: ₹98,460 per 10g (24K retail)
May 12–16, 2025: ₹96,535 per 10g (MCX), ₹98,680 (24K retail)

This equates to a 1.5% to 3.5% increase over the three-week period.

The price surge was driven by rising import costs, rupee depreciation, and anticipatory buying ahead of the wedding season. Higher duties and global price spikes forced Indian jewelers to pass on increased costs to consumers, sustaining elevated domestic gold rates despite seasonal fluctuations.

The April 2025 gold surge was driven not only by global geopolitical instability but also by the direct impact of the U.S.-India tariff clash. As tariffs reshaped trade flows and investor sentiment, gold prices climbed to record highs worldwide. India, as a key player in the gold economy, was especially affected, both in terms of export viability and domestic retail dynamics. With central banks continuing to accumulate reserves and trade tensions far from resolved, gold is likely to remain a cornerstone of global financial security through the remainder of the year.