Geopolitical shocks and economic speculation have caused significant fluctuations in the precious metals market in July 2024. The month started with a dramatic event when a 20-year-old attempted to assassinate former US president Donald Trump at an election rally. This incident raised speculation about the possibility of another Trump presidency, leading to uncertainty in the market. Trump's subsequent order to the US Federal Reserve chief, Jerome Powell, not to cut interest rates until after the presidential elections in November, further added to the uncertainty surrounding precious metals [bf191db0].
The price of palladium surged and briefly surpassed platinum, reaching over $1,000 per ounce. Gold prices also experienced a significant increase, crossing $2,400 per ounce and reaching a new all-time high of $2,484 per ounce on July 17. However, gold and silver prices declined after Trump's warning to the US Federal Reserve [bf191db0].
In addition to geopolitical shocks, the Indian Budget announcement on July 23, 2024, had a surprising impact on the precious metals industry. The budget included a reduction in import duty on gold, silver, and platinum. This move aims to discourage smuggling and promote transparency in the import of these metals. However, the reduction in import duty may be offset by a potential increase in the Goods and Services Tax (GST) on gold and silver. The market is eagerly awaiting the US Federal Reserve's decision on interest rate cuts, as it will have a significant impact on gold prices [bf191db0].
The author of the article notes that geopolitical tensions have a greater effect on gold prices than US elections. However, the unpredictability of the Trump administration may also benefit the gold market. It is important to note that the views expressed in the article are those of the author's and do not necessarily reflect the views of the GJEPC [bf191db0].