An employee counts Indian rupee currency notes inside a private money exchange office in New Delhi July 5, 2013. India’s central bank was seen selling dollars via state-run banks on Friday as the rupee approached its record low of 60.76 seen on June 26, four dealers said. REUTERS/Adnan Abidi (INDIA – Tags: BUSINESS)
| Photo Credit: Reuters

The rupee surged 38 paise to 84.58 (provisional) against the U.S. dollar on Wednesday (April 29, 2025) as trade-deal hopes and foreign fund inflows boosted investor sentiments.

U.S. President Donald Trump’s statement that tariff talks with India are in a positive direction enthused investors, forex dealers said.

However, geopolitical tensions between India and Pakistan and a muted sentiment in domestic equities weighed on investor sentiments.

At the interbank foreign exchange, the domestic unit opened at 85.15 and moved between the intra-day high of 84.47 and the low of 85.15 against the greenback. The unit ended the session at 84.58 (provisional), registering a gain of 38 paise over its previous closing level.

On Tuesday (April 29, 2025), the rupee gained 27 paise to settle at 84.96 against the U.S. dollar.

Meanwhile, Mr. Trump said negotiations with India over a bilateral trade deal are “coming along great”, and he thinks Washington will “have a deal” with New Delhi.

Mr. Trump made the remarks on Tuesday (April 29, 2025) while speaking to reporters before departing the White House for a rally in Michigan, marking the first 100 days of his second administration.

“India is coming along great. I think we’ll have a deal with India,” said the President.

“Prime Minister (Narendra Modi), as you know, was here three weeks ago, and they want to make a deal. We’ll see what happens,” he added.

Prime Minister Modi visited the White House in late February.

The dollar index, which gauges the greenback’s strength against a basket of six currencies, was trading higher by 0.20% at 99.44.

Brent crude, the global oil benchmark, fell 0.81% to $63.73 per barrel in futures trade.

In the domestic equity market, the 30-share BSE Sensex declined 46.14 points, or 0.06%, to close at 80,242.24, while the Nifty fell 1.75 points or 0.01% to settle at 24,334.20.

Foreign institutional investors (FIIs) bought equities worth ₹2,385.61 crore on a net basis on Tuesday (April 29, 2025), according to exchange data.

Meanwhile, the Cabinet Committee on Security (CCS), chaired by the Prime Minister, is understood to have deliberated on the overall security situation in Jammu and Kashmir on Wednesday (April 30, 2025) amid speculations about India’s possible retaliation to the Pahalgam terror attack in view of its cross-border linkages.

The CCS meeting was held at the Prime Minister’s Lok Kalyan Marg residence, a day after he held a meeting with the top military brass and accorded operational freedom to the armed forces on the “mode, targets and timing” of India’s response to the April 22 attack that killed 26 people.

It was attended by Defence Minister Rajnath Singh, Home Minister Amit Shah and External Affairs Minister S. Jaishankar, people familiar with the matter said.

India-Pakistan tensions escalate: India may challenge a proposed $1.3-billion International Monetary Fund (IMF) loan for Pakistan at the forthcoming board meeting of the global institution, according to three sources privy to the deliberations.
On May 9, the IMF board will evaluate a fresh $1.3-billion arrangement for Pakistan under its climate resilience loan programme. Additionally, it will assess the ongoing $7-billion bailout package, including the status of policy commitments.
“There is a view that support to terror by the neighbouring nation be flagged at the board meeting when the loan is taken up,” a source informed ET.
Pakistan and the IMF reached an agreement in July 2024 for a $7-billion package under the extended fund facility. The programme necessitated Pakistan to implement effective policies and reforms to enhance macroeconomic stability, tackle fundamental structural issues, and establish conditions for robust, inclusive and sustainable growth.
Also Read | With Indus Waters Treaty suspended, Modi government looks to expedite five major J&K hydroelectric power projects
The IMF is releasing the $7 billion in installments, and the board’s approval is essential for the next $1 billion tranche to be released.
Previously, India had abstained from casting its vote on the bailout package extended to its neighbour to bolster its struggling economy. In this instance, India might cast a negative vote against IMF assistance to Pakistan, citing fund misappropriation and technical reasons, another source indicated.
Following the terrorist attack in Pahalgam, India has implemented various measures against Pakistan, including suspending the Indus Waters Treaty with the neighbouring nation.
S Jaishankar, the external affairs minister, held discussions on Tuesday with his counterparts from seven non-permanent UN Security Council member nations. He is believed to have informed them about the cross-border connections to the April 22 terrorist incident that resulted in 26 civilian casualties.

Gold is always considered a haven and a good asset class for hedging. Financial experts suggest investing in it when in doubt or fear — be it of market crashes, volatility, recession, inflation, or hyperinflation. For this reason, not just individuals, even institutional players and countries at large invest in gold.

As per the World Gold Council (WGC) Q4 2025 data, India’s gold reserves are at 876.18 metric tonnes, and the Reserve Bank of India (RBI) was the second-highest central bank, after Poland, to purchase gold. India added 72.6 tonnes of gold to its kitty in 2024, raising its gold reserves bar by 9%, thereby putting India in the top 10 countries with the largest gold reserves.

The price of the yellow metal surpassed $3,500-an ounce and was an all-time high on April 22, 2025, owing to geopolitical tensions triggered by U.S. President Donald Trump’s tariff hikes. This is not a one-off moment when gold prices have reacted to the twists and turns in the global geopolitical landscape. History is replete with instances of gold buying frenzies despite the sticker shock. As per the WGC, around 2,16,265 tonnes of gold have been mined throughout history. So why this gold rush, and what determines gold’s price?

Is gold an investment vehicle?

From the lens of investment, gold is not a ‘productive’ asset, insofar as regular cash flows. For informed investors, it might remain enigmatic as to why people buy gold when prices are on a tear, despite its ‘unproductiveness.’

In India, factors such as import duties, tax rates, local demand and supply, strength or weakness of Rupee are also taken into account before the final price is fixed.
| Photo Credit:
Vaishali R Venkat

Say for instance, investment in equity offers you part-ownership in a company and access to cash flows, in the form of dividends, in proportion to the number of shares you have purchased. On top of it, when the company grows, it gets reflected in the current market price. Likewise, you gain interest income for bonds, fixed/recurring deposits. Investing in a property gives you a rental income. But, gold doesn’t beget cash flows, and comes with the hassle of maintenance cost and safety concerns.

Hedge against uncertainty

But financial experts view gold as a tool for hedging, rather than a mode of investment. When a storm of uncertainty unleashes, the anchor of gold keeps you afloat. Gold is used as a hedge not just against hyperinflation or market volatility, but also against extreme uncertainties.

It’s an axiomatic historical truth that during the toughest times of India-Pakistan Partition in 1947, millions of people were displaced, and those who carried gold heirlooms felt more secure financially. Gold is easily portable, cashable, and globally accepted, even though it is not considered a currency now.

What determines the gold price?

Fixing a price for the yellow metal is not a no-brainer. Multiple factors in the global arena – demand and supply, economic conditions, geopolitical tensions, inflation, the U.S. Fed interest rates, currency fluctuations, Rupee-dollar equation, strength of the U.S. dollar, central bank policies, buying and selling of gold reserves by countries – play a vital role in arriving at the value of gold. On the supply side, gold mining, recycling, exploration cost also impact its price.

In India, factors such as import duties, tax rates, local demand and supply, strength or weakness of Rupee are also taken into account before the final price is fixed. Seasonal trends, such as festivals, weddings or auspicious days, such as Askhaya Tritiya, also boost demand and impacting its price.

Who determines the gold price?

The London Bullion Market Association (LBMA) fixes the gold price as the benchmark for the global gold market. At the LBMA, gold prices are released twice every day – at 10:30 a.m. (GMT) and 3 p.m. (GMT). LBMA says, “Prices are set in U.S. dollars per troy ounce [approximately 31 grams]. Euro and Sterling prices are indicative and for settlement only.”

In India, the India Bullion and Jewellers Association Limited (IBJA) publishes gold and silver rates twice daily – at 12 noon and 5 p.m. The gold price is not released on weekends and during public holidays. It releases rates for various gold purity – Gold 999, Gold 995, Gold 916, Gold 750, Gold 585, and Silver 999. Though gold purchase of all forms attracts a GST of 3%, rates released by IBJA does not include GST, other taxes and making charges.

(The writer is an NISM & CRISIL-certified wealth manager)