CHENNAI: Gold prices surged to record highs on Tuesday (Sept 16), driven by expectations of a US Federal Reserve interest rate cut, a weakening US dollar, and rising safe-haven demand amid global economic uncertainties.
Globally, spot gold reached a record high of $3,697.70 per ounce during the day and settled at $3,683.28 per ounce. US gold futures for December delivery remained steady at $3,720.10 per ounce. The US dollar index weakened to a more than two-month low against rival currencies, making gold more attractive to investors holding other currencies.
In India, gold prices also touched new highs. The Multi Commodity Exchange (MCX) October futures contract for gold surged to Rs 1,10,548 per 10 grams, while the December contract reached Rs 1,11,599 per 10 grams. Spot gold prices in major cities ranged from Rs 1,10,260 to Rs 1,12,150 per 10 grams, depending on the purity and local market factors.
Key factors contributed to this rally
Markets are pricing in a 25 basis point rate cut by the Federal Reserve, which would lower the opportunity cost of holding gold, a non-yielding asset. Some analysts expect further rate cuts in 2026, providing continued support for gold prices.
The dollar’s decline against other major currencies increased gold’s appeal as it became cheaper for foreign investors to buy. The dollar index touched a two-month low, enhancing gold’s attractiveness.
Ongoing geopolitical tensions, inflation worries, and global economic uncertainties led investors to flock to gold as a stable store of value.
Looking ahead, while gold has reached historic highs, analysts suggest a possible short-term correction of 5–6 percent before the upward trend resumes. The expectation is for gold to potentially cross the $4,000 per ounce mark in 2026, depending on further central bank policies, global economic data, and market sentiment.
Investors and consumers are advised to remain updated on global economic indicators, central bank announcements, and geopolitical developments, as these factors will play a critical role in determining gold’s future movement.