On Tuesday, October 14, gold prices reached record levels, with strong demand for safe-haven investments, global trade conflicts, and expectations of additional rate cuts by the US Federal Reserve being the main drivers.
On the Multi Commodity Exchange (MCX), December gold futures jumped Rs. 1,800 or 1.5% to Rs. 1,26,437 per 10 grams.
The sharp increase in gold price follows rising geopolitical and economic uncertainties. Renewed trade tensions between the US and China amid global economic slowdown have increased the demand for precious metals among investors.
US President Trump’s declaration of 100% tariffs on goods from China and imposing new restrictions on the export of US-made software has increased the demand for safe-haven assets.
Additionally, the market expects two more Fed rate cuts this year, which typically support gold, weakening the US dollar and reducing bond yields.
Increased central bank buying and steady ETF inflows are also fueling the rally.
Globally, spot gold climbed 0.4% to $4,124.79 per ounce, after hitting an all-time high of $4,131.52. US gold futures for December rose 0.3% to $4,143.10
In Mumbai, 24-carat gold prices rose sharply to Rs. 12,868 per gram, up Rs. 328 from the previous day’s Rs. 12,540. For 10 grams, the price now stands at Rs. 1,28,680, marking a gain of Rs. 3,280.
22-carat gold climbed to Rs. 11,795 per gram, up Rs. 300 from Rs. 11,495 yesterday. The 10-gram rate for 22-carat gold increased to Rs. 1,17,950, reflecting a Rs. 3,000 rise.
Chennai followed a similar uptrend. The 24-carat gold rate advanced to Rs. 12,900 per gram, up Rs. 267 from Rs. 12,633 on Monday. Ten grams of 24-carat gold now cost Rs. 1,29,000, gaining Rs. 2,670 in a single day.
Meanwhile, the cost of 22-carat gold went up by Rs. 245 from Rs. 11,580 and reached Rs. 11,825 per gram, whereas the value of 10 grams rose by Rs. 2,450 to Rs. 1,18,250.
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According to analysts, investors should remain cautious at these high levels. Gold's long-term fundamentals are still strong because of the global uncertainties and rate cut expectations, but corrections are still possible in the short term. Short-term traders could consider partial booking, whereas long-term buyers may consider buying the dips.
Despite the global instability, gold continues to shine as a safe-haven asset with prices in both domestic and international markets reaching record levels.