Bullion: Gold and silver rise to new heights
The most striking reaction came from the precious metal market. On August 8, Indian gold prizes rose to a new lifelong high, driven by global uncertainty, a weakening rupid and fears for inflationary pressure resulting from the rates. Silver prices also gathered and floated near recent highlights.
The rates can directly affect the precious stones and jewelry industry of India, because it is one of the largest exported items from India to the US.
With American buyers who are confronted with higher costs, the demand for Indian gold jewelry abroad can decrease, but domestic investors are used to gold as a safe haven. The rise in prices reflects both speculatively buying and a cover against currency debit.
Energy raw materials: crude oil and decline of natural gas
On the other hand, crude oil and natural gas prices in India fell sharply after the rate announcements. This counter -intuitive move was largely powered by the fear of reduced global demand and potential oversupply, because India – one of the world’s largest oil importers – continues to buy fines for Rusian oil through the Russian oil. The American rates, seen as a fine for the energy ties of India with Russia, have created uncertainty in global energy flows. Traders expect that India can diversify its oil sources, which may reduce the spot market demand. Moreover, the broader risk-off sentiment on the worldwide markets has weighed energy prices, where natural gas futures also fall in the midst of the expectations of slower industrial activity.
Basic metals: Volatility is central
Basic metals such as copper, aluminum, zinc and lead have experienced increased volatility. These metals are crucial for the export and production export of India, many of which are now subject to the rate of 25%.
Copper and aluminum in particular saw sharp intraday fluctuations while traders weighed the impact of reduced export competition capacity against a possible increase in domestic demand. With American buyers who will probably shift purchasing to other countries, Indian exporters are confronted with shrinking ordering books. However, some domestic manufacturers can benefit from reduced export competition, creating a complex and volatile price environment.
Currency markets: Repoie is approaching record Lows
The Indian rupid has not been spared. It deals with the dollar near RS 88, near its record weak levels. The depreciation reflects the concern of investors about the trade balance of India, potential capital outflows and the broader economic impact of the rates.
A weaker rupid makes Import more expensive, which contributes to inflationary pressure, but it also makes Indian exports more competitive worldwide – although this benefit is largely compensated by the rates themselves.
Wider implications and prospects
The rates have caused a chain reaction in the Indian economy. But India’s reaction has been measured. Instead of taking revenge on counter -fee, the government focuses on trade negotiations and structural reforms. In the meantime, the government is investigating trade diversification strategies, including stimulating exports to Europe, Africa and Southeast Asia.
In the short term, volatility will probably continue to exist on raw materials and currency markets. But in the long term, this episode can accelerate India’s urge for self -reliance, trading diversification and deeper integration into global supply chains.
(The author is head of Commodity Research, Geojit Investments Limited)
#Trumps #tariff #shock #Indias #raw #materials #currency #responded