Gold crosses Rs 1.06 lakh mark: Will buyers hold back this festive season?
CHENNAI: Gold prices continued their record-breaking run on Wednesday, supported by growing investor belief that the US Federal Reserve will cut interest rates this month and by persistent global uncertainty that is driving safe-haven demand. Spot gold edged higher to about $3,537 per ounce, after touching an intraday peak of $3,547, while US gold futures for December delivery climbed to nearly $3,603.
The yellow metal’s surge reflects a mix of economic and political factors. Traders now see a more than 90 percent chance that the Fed will cut its benchmark rate at the September 17 policy meeting. Lower interest rates reduce the appeal of yield-bearing assets and typically boost non-yielding assets such as gold. At the same time, political uncertainty in the United States and lingering concerns around trade tariffs and inflation are encouraging investors to park money in safer assets.
Investor inflows into gold-backed exchange-traded funds have also picked up pace. Holdings in the SPDR Gold Trust rose to 990.56 tonnes, the highest in three years, showing renewed confidence in bullion as a long-term hedge. Central banks in Asia and Europe have also stepped up purchases, further strengthening demand.
In India, the world’s second-largest consumer of gold, futures prices for October delivery on the MCX reached an all-time high of Rs 1,06,199 per 10 grams, rising by Rs 407 in a single session.
Analysts say the surge reflects both international momentum—where spot gold crossed $3,537 per ounce—and steady domestic demand ahead of the festive season. With Diwali and the wedding season approaching, traders expect buying interest to stay firm despite record prices.
The weaker rupee and global uncertainties are also adding to the price pressure. Still, jewellers note that consumer sentiment has not cooled significantly, as gold retains its status as both a safe-haven investment and a traditional purchase during festivals.
Market watchers note that the rally is also tied to rising bond yields globally, which highlight fiscal and inflation concerns. In such a climate, gold is increasingly seen as a hedge against both economic volatility and currency risks.
Looking ahead, all eyes are on the upcoming US jobs report due Friday. A weak set of employment numbers could strengthen the case for a rate cut and push gold even higher. For now, bullion continues to find strong support from investors seeking safety, marking one of its most sustained rallies in recent history.