Fundamental News and Triggers

• Investors rushed to safe-haven assets, including gold, after U.S. President Donald Trump imposed higher-than-expected import tariffs, escalating the already-heated global trade war.

• Trump imposed a 10% duty on all imports to the US and increased tariffs on dozens of countries, including major trading partners, escalating the trade tensions and trade war.

• Fears of a US recession and a slowing global economy are fueling a rush for gold, which might propel the commodity even higher. Markets are now pricing in 85 to 90 basis points of cuts by the end of the year, up from 75 to 80 basis points on Wednesday.

Technical Triggers      

• Until the Gold June contract sustains above $3145 (~Rs 91000), it is expected to continue its uptrend for the next psychological resistance of $3200 (~Rs 92000) and $3250(~Rs 93500).

• Silver is still trading in its range of $32 to $35. If prices sustain above $35, it can continue this uptrend, for the next target of $38 (Rs 110,000).

Gold & Silver Support and Resistance Levels

Indian gem & jewellery industry, like the rest of the world, is trying to analyse the evolving global economic landscape due to the reciprocal tariff announcement by USA on countries worldwide. The Gem & Jewellery Export Promotion Council (GJEPC) though understands the U.S. administration’s intent to address trade and tariff imbalances through reciprocal tariffs, however urges the U.S. to uphold the spirit of the longstanding trade partnership between India and the United States, which has been built on mutual respect and shared economic interests.

The Trump administration’s announcement of a 27% reciprocal tariff on Indian gem and jewellery exports to the US would be a significant burden on Indian exporters and American consumers alike. While the tariff’s application to competing nations presents both challenges and opportunities, it is likely to significantly impact India’s diamond and jewellery sector—a cornerstone of its exports to the US. In the long term, we foresee a reshaping global supply chains. In short run, we anticipate challenges in sustaining India’s current export volume of USD 10 billion to the US market. We urge the Government of India to progress the Bilateral Trade Agreement between India and the US, as it would be crucial in navigating the tariff issues and securing long term interest of the sector.

Additionally, GJEPC is actively engaging with stakeholders to address these risks and advocate for balanced solutions that ensure continued access to the U.S. market.

India’s $32 billion gems and jewellery industry is gearing up for a sharp decline in exports as the imposition of hefty U.S. tariffs is expected to disrupt sales to its largest market, officials say. The United States recently imposed a 26% reciprocal tariff on India, marking a significant setback to the country’s export ambitions under President Donald Trump’s global trade policy.

“The tariff is higher than expected,” said Colin Shah, managing director of Kama Jewelry, one of India’s leading diamond jewellery manufacturers. “It is quite severe and will affect exports.”

India remains the world’s largest hub for diamond cutting and polishing, processing nine out of every ten diamonds globally. The United States accounts for nearly $10 billion—or 30.4%—of India’s annual gems and jewellery exports.

Despite its importance, the gems and jewellery sector, India’s third-largest export to the U.S. after engineering and electronics, is already struggling. The industry employs millions in India and has seen a recent downturn due to weak demand from China, resulting in a 14.5% drop in exports to $32.3 billion in the 2023-24 fiscal year.

However, industry leaders remain optimistic that a long-term bilateral trade deal with the U.S. could alleviate some of the negative impact. “We’re pretty hopeful that India could land a trade deal with the U.S. in the next few months. So, we just need to push through this tough phase for a little while longer,” said Shaunak Parikh, vice chairman of the Gem and Jewellery Export Promotion Council (GJEPC).