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AUGMONT WEEKLY BLOG:Gold on beast mode as Liberation Day approaches

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Gold has continued its terrific run, on beast mode, hitting $3177 (Rs 91400) to set another milestone, as uncertainty about tariffs that would drive inflation and deteriorate economic development boosted safe-haven demand and maintained gold on track for its best quarter since 1986. The buying demand in gold continues unabated, with markets scrambling for shelter in the traditional store of wealth amid concerns over US President Donald Trump’s tariff plans on ‘Liberation Day’, April 2.

What is Liberation Day?

As per Wikipedia, “Liberation Day is a day, often a public holiday, that marks the liberation of a place, similar to an Independence Day. Liberation marks the date of either a revolution, as in Cuba, the fall of a dictatorship, as in Syria, or the end of the occupation by another state, as in the Netherlands, thereby differing from the original independence day or creation of statehood, while in Italy commemorates the victory of the Italian resistance movement against Nazi Germany and the Italian Social Republic, a puppet state of the Nazis and rump state of the fascists, the culmination of the liberation of Italy from German occupation and the Italian civil war in the latter phase of World War II”.

US Liberation Day on April 2

Donald Trump has threatened a “Liberation Day” with tariffs on countries having persistent trade deficits with the US. On Wednesday, April 2, the world will learn about Donald Trump’s new style of doing business with almost everyone. That is when the White House will unveil its tariff plan, which includes duty increases for all countries that trade products and services with the United States. Trump has not hinted at imposing a levy on gold, but the prospect of such a move has pushed prices to their current levels. Is gold taxed on imports? We find out on Wednesday. Until then, speculation is likely to continue in full swing.

Trump rattling the markets

Furthermore, US President Donald Trump shook markets last week by placing 25% tariffs on all non-American vehicles and light trucks ahead of the so-called reciprocal tariffs, which are scheduled to take effect on April 2. On Sunday, Trump expressed his rage and frustration with Russian President Vladimir Putin, threatening large tariffs on Russian energy and even bombings in Iran. He also stated that if he believes Moscow is impeding his efforts to end the Ukraine conflict, he will slap secondary tariffs ranging from 25% to 50% on Russian oil customers. Trump also slammed Ukrainian President Volodymyr Zelenskiy, warning that he would suffer serious consequences if he pulled out of the important rare earth minerals deal. This further weighs on investors’ sentiment and contributes to the global flight to safety.

What next?

Bullion is up around 18% this year after climbing more than 27% in 2024, owing to a favorable monetary policy background, significant central bank buying, and demand for exchange-traded funds, among other things. This comes on top of continuing concerns over slowing US economic growth, which drives stagflation fears, pulling the US Dollar down and providing more support to gold.

The next resistance for gold is $3210(~Rs 92000) while Silver is stuck in the range of $33 to $35, prices need to sustain above its $35 resistance to head higher towards $38.

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National News

AIJGF Proposes Regulated “Bullion Bank”, Proposal Presented Directly To Union Commerce and Industry Minister

Establishes A Centralized Financial Framework To Pool, Standardise, Settle, and Lease Domestic Gold

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The Ministry of Commerce and Industry is officially reviewing a landmark proposal to establish a regulated “Bullion Bank” aimed at transforming India’s massive domestic gold reserves into an active economic asset.

The proposal was presented directly to Union Commerce and Industry Minister Piyush Goyal by a delegation from the All India Jewellers and Goldsmith Federation (AIJGF). In response, Minister Goyal has agreed to form a comprehensive consultation committee—comprising government representatives, jewellery industry stakeholders, bullion market experts, financial institutions, and market regulators—to thoroughly examine the framework.

Key Highlights of the Proposal:

  • Activating Idle Wealth: Establishes a centralised financial framework to pool, standardise, settle, and lease domestic gold, significantly reducing India’s heavy reliance on expensive foreign imports.
  • Tapping a $4 Trillion Market: Aims to mobilse the estimated 25,000 to 27,000 tonnes of gold held by Indian households, temples, and private institutions—a stockpile currently valued between $3.65 trillion and $4.3 trillion.
  • Earning Interest on Gold: Transforms physical gold from a passive, non-yielding asset into an active, interest-earning investment, eliminating traditional locker storage fees for citizens.
  • ETF Integration: Proposes allowing Gold Exchange-Traded Funds (ETFs) to lend 20–30% of their idle physical holdings back into the jewellery ecosystem under strict over-collateralised, insured, and daily marked-to-market safety protocols.

A Strategic Move for Economic Resilience

Currently, the vast majority of India’s gold wealth remains locked away and unproductive. By acting as a trusted intermediary, the proposed Bullion Bank will allow households and institutions to securely lend their gold back into the domestic jewellery ecosystem.

“This framework has the potential to permanently change how India manages its gold,” stated the AIJGF in their proposal. “By unlocking domestic reserves, we can stabilise the market, support local artisans, and strengthen the national economy.”

To ensure seamless execution and regulatory oversight, the AIJGF has also requested the creation of a dedicated inter-ministerial task force. This body would bring together the Ministry of Finance, the Ministry of Commerce, and the Ministry of Consumer Affairs to oversee the initiative’s roll-out.

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