MUMBAI: The safe haven asset gold has shattered all records and has breached the psychologically sensitive $4,000-per ounce mark globally (peaking at $4016/oz for spot gold and $4,050/oz futures), while the domestic prices crossed Rs 1.22 lakh per 10 grams, amid rising global uncertainty and more rate cut expectation and analysts don’t see a halt to the rally which has already delivered 55% so far this year.
In the domestic market, gold futures on the Multi-Commodity Exchange (MCX) scaled a new lifetime high on Wednesday, surging to Rs 1,22,101/10 grams for the December contract. The historic surge, up Rs 819 or 0.68% for the day, underscores the strong investor appetite for safe-haven assets amid intensifying global uncertainties and expectations of more monetary easing by the US and other major central banks.
Silver futures, on the other hand, too joined the rally, rising Rs 1,221 to Rs 1,47,013 per kg.
The metal has so far given more than 55% since the beginning of this year and many expect the rally to continue though some begin to warn of exhaustion setting in faster than later. This comes on the back of a 27% rally in 2024 and another 24% in the previous year.
Globally, other precious metals markets, spot silver rose 1.3% to $48.44 per ounce, platinum gained 2.4% to $1,657.33 and palladium climbed 2.3% to $1,368.68.
The rally is being driven by a cocktail of factors, including expectations of more interest rate cuts, ongoing political and economic uncertainty, the lingering US Federal shutdown, solid central bank buying (major central banks have snapped up 15 tonnes so far this year, which is though is much lower than last year’s 90 tonnes), inflows into gold exchange-traded funds and a weak dollar.
The US government shutdown has entered its eighth day today, which has led to postponement of key data releases indicators from the world's biggest economy, forcing investors to rely on secondary, non-government data to gauge the timing and extent of Fed rate cuts. Wall Street is now pricing in a 25 bps cut at the Fed meeting later this month, with an additional 25 bps reduction in December.
Gold pushed through $4,000 an ounce mark to hit a record on Wednesday on the Chicago Mercantile Exchange. The metal peaked at $4050, driven by investors seeking safety from mounting economic and geopolitical uncertainty, alongside expectations of further interest rate cuts by the US Federal Reserve next week.
Spot gold was up 0.9% at $4,017.16 per ounce in early morning trade in the US, while gold futures for December delivery gained 0.9% to $4,050 per ounce.
Gold is seen as a store of value during times of instability. As one of the best-performing assets of 2025, spot gold is up 53% year-to-date after rising 27% in 2024 and 24% in the previous year.
Political turmoil in France and Japan has also boosted demand for the safe-haven bullion. The latest leg higher has been sparked by the election of conservative Sanae Takaichi over the weekend and the prospect of deeper deficit spending in Japan. That itself ties into a key theme at the moment, according to Japanese media.
Analysts expect strong inflows into exchange-traded funds backed by physical gold, central bank buying and the prospect of lower US interest rates to support gold prices in 2026, prompting Goldman Sachs and UBS to raise their price outlooks.
But analysts at Bank of America have called for caution and warning of “uptrend exhaustion” setting in sooner than later.
According to the World Gold Council, net inflows into domestic gold ETFs totalled $902 million in September, a 285% increase from $232 million in August. This was the fourth consecutive month of inflows, and all months of 2025 saw positive traction except for March and May, Renisha Chainani, head of research at glodtrading platform Augmont said.
“As the bull-run continues, gold rally crossing $4050 (Rs 1,22,500), can show more upward spikes towards $4150 (Rs 1,25,000), but one needs to be very cautious at this level. On the other hand, if gold falls below $3950 (Rs 1,20,000), we can say, top has been made, and a correction will follow,” Chainani told TNIE Wednesday.
He feels silver is ALSO on the way to touch $50 (Rs 1,50,000), as the bull run continues. At $47 (Rs 1,45,000) is very strong support. If prices sustain below this level, we could see more correction or profit booking, he added.
He sees the international support level for gold at $3850 and resistance level at $4150/oz while the same for gold domestic prices : Rs 1m17,000 and Rs 1,25,000/10 gm repectively. Similarly for silver, support level is $46.50 and resistance at $50/oz and at Rs 1,42,000 and Rs 1,50,000/kg respectively.
