Finance Minister Sitharaman Addresses Gold Price Surge and Government Monitoring
Union Finance Minister Nirmala Sitharaman provided insights into the recent escalation in gold prices on Monday, emphasizing that the government is actively observing the situation. Speaking after the customary post-Budget meeting with the Central Board of Directors of the Reserve Bank of India, she highlighted key factors driving the uptrend.
Central Bank Purchases and Seasonal Demand Fuel Price Hikes
Sitharaman pointed out that a significant contributor to the spike in gold prices is the increased buying activity by central banks worldwide. "Most countries today, particularly their central banks, are purchasing gold and silver and storing them," she stated. "The current surge is largely due to central banks also acquiring and hoarding these precious metals."
Additionally, she noted that gold remains a preferred investment for households in India, with demand experiencing seasonal peaks during festival periods. "Gold has always been a favored investment for households... The high-pitched demand for domestic consumption also sees a seasonal spike during the festival season," Sitharaman explained.
Government and RBI Vigilance on Price Trends
While acknowledging the price increases, the Finance Minister assured that the government is closely monitoring the developments. "We are watching it, but I'm not sure it has reached such alarming proportions. I think it has not gone beyond a certain limit. But of course, RBI will also be monitoring it," she remarked, indicating a measured approach to the situation.
Recent Gold Price Movements and Market Data
Concurrently, gold prices have continued to climb, reflecting global trends and concerns related to tariffs. In Monday's futures trade, gold prices surged by Rs 2,946 to reach Rs 1,59,822 per 10 grams. On the Multi Commodity Exchange (MCX), April gold contracts increased by Rs 2,946, or 1.88%, to Rs 1,59,822 per 10 grams, with a business turnover of 7,515 lots.
Internationally, gold futures on Comex rose by $96.61, or 1.9%, to $5,177.51 per ounce, underscoring the widespread nature of the price hike.
Impact of US Tariff Ruling and Trade Deal Discussions
Sitharaman also commented on the India-US trade deal, mentioning that the finance ministry is evaluating the potential effects of a recent US Supreme Court decision. The court struck down former President Donald Trump's tariff framework under the International Emergency Economic Powers Act (IEEPA), deeming it illegal and altering the global tariff landscape.
"It is early to comment," she said regarding the ruling's implications, highlighting the ongoing assessment by Indian authorities.
Call for Participation in India's Economic Growth
In her address, Sitharaman urged citizens to contribute to the nation's economic advancement. "Everybody should participate in India's growth story," she emphasized, reinforcing the collective effort needed for sustained development.
Attendees at the Post-Budget Meeting
The post-Budget meeting was attended by key officials, including Finance Minister Nirmala Sitharaman, Minister of State for Finance Pankaj Chaudhary, and the RBI Governor, underscoring the high-level discussions on economic matters.
