International News
Gold volatility spikes on geopolitics, trade wars
Gold prices rose today on safe-haven buying after US President Donald Trump reignited the trade war by raising tariffs on Chinese goods to 100% and imposing export controls on “any and all critical software”. Gold saw a dip on Friday on the heels of Israel Hamas ceasefire. The unprecedented gold price rally came to a halt on Friday, offering some relief to investors and retail jewellery buyers alike. On the occasion of Karwa Chauth, gold prices in India witnessed a sharp correction on October 10.
US-China Trade Tensions (Escalating Uncertainty)
Renewed fears of a full-blown trade war between the United States and China are a major factor driving recent spikes in gold prices.
- Trade War Impact: Threats of new, high-rate tariffs (e.g., a potential 100% tariff on Chinese goods) and export restrictions create economic uncertainty, which investors traditionally hedge against by buying gold.
- Inflationary Pressure: Tariffs can raise the cost of imported goods, leading to inflationary pressures. Gold serves as a classic hedge against inflation, directly boosting its demand and price.
- Currency Weakness: An escalating trade dispute can cause the US Dollar (USD) to weaken relative to other currencies, which makes dollar-denominated gold cheaper for international buyers, further stimulating demand.
Hamas-Israel Conflict & Ceasefire Volatility (Risk Premium)
The conflict in the Middle East contributes a significant “geopolitical risk premium” to the price of gold.
- Safe-Haven Demand: The outbreak and escalation of the conflict (from October 2023 onward) immediately triggered a surge in gold buying as investors sought to protect capital from the sudden, high-stakes political and military instability.
- Ceasefire Impact: Reports of a US-brokered ceasefire agreement or de-escalation tend to have the opposite, negative effect, temporarily easing the geopolitical risk premium. This can cause short-term price corrections or dips in gold as market fears subside.
- Regional Spillover: The threat of the conflict spreading and disrupting global energy supplies (e.g., oil) creates potential inflationary risk, which reinforces gold’s appeal regardless of temporary ceasefires.
DiamondBuzz
Diamond Slump forces Debswana to diversify into copper, platinum and solar
Diamond-centric mining models is giving way to broader resource portfolios
Debswana Diamond Company, the 50–50 joint venture between the Botswana government and De Beers, is moving to diversify into copper, platinum and renewable energy as the prolonged downturn in natural diamond demand pressures earnings and forces the industry to rethink its growth strategy.
The company’s board has approved plans to invest in a portfolio of non-diamond projects after revenue fell 46% in 2024, the latest available financial year, highlighting the scale of the downturn in the global diamond market.
The move signals a strategic shift toward commodities with stronger long-term demand fundamentals, particularly copper, which is central to global electrification and energy-transition infrastructure.
Debswana’s diversification reflects a broader industry pivot as diamond producers confront weak consumer demand, rising competition from lab-grown stones and elevated inventories across the supply chain.
The shift is also visible among smaller exploration companies. Botswana Diamonds recently rebranded as Botswana Minerals, signalling its own strategic focus on copper exploration rather than diamonds.
Together, these moves underscore a growing consensus across the sector: the era of diamond-centric mining models is giving way to broader resource portfolios anchored in energy-transition metals.
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