On Tuesday, gold prices continued to rise, setting new record highs in both domestic and global markets. The price surge is attributed to persistent global macroeconomic uncertainty, heightened expectations of a US Federal Reserve rate cut, and increased local demand for safe-haven assets.
On the Multi Commodity Exchange (MCX), December gold futures jumped Rs 723 or 0.65% to hit a record high of Rs 1,10,312 per 10 grams. October contracts, one of the most actively traded, surged even further, climbing Rs 982 or 0.9% to Rs 1,09,500 per 10 grams.
Despite a slight cooling afterward, the price of 24-carat gold in the spot market remained firm at Rs. 1,08,037 per 10 grams, underlining the continuation of a strong bullish trend. Analysts attribute the surge to a weaker US dollar and expectations of dovish monetary policy from the Federal Reserve.
The international markets followed the domestic rally, with December Comex gold futures touching $3,698.02 per ounce, setting a new high. Spot gold also surged to $3,658.38 per ounce.
Investors are clearly more eager for bullion as a hedge against chaotic markets. Silver followed suit, reaching its highest price in 14 years, which suggests that the precious metals complex is benefiting from the global flight to safety.
Market participants are placing significant bets on an aggressive policy shift by the Fed. Recent US employment data revealed that non-farm payrolls increased by just 22,000 in August, falling short of forecasts of 75,000, while the unemployment rate rose to 4.3%.
This weaker-than-expected labour data has raised speculation that the Fed could cut rates by as much as 75 basis points over the remainder of the year. Even the base expectation of a 25-basis-point cut is now fully priced in, with a growing minority anticipating deeper easing.
The US dollar index slipped to a six-week low of 97.25, weighed down by soft jobs data and falling Treasury yields. The greenback’s weakness against major currencies, such as the yen, pound, and euro, has made gold more attractive to overseas investors, further boosting demand.
Ongoing hostilities in Eastern Europe, especially a newly renewed escalation between Russia and Ukraine, continue to establish gold's appeal as a safe-haven investment. Discussions of new US sanctions on Moscow have heightened market tensions and prompted investors to rush to gold.
Also Read: Gold Price Today: Gold Plummets After Record Highs, All Eyes on Fed's Next Move
US President Donald Trump announced tariff exemptions for selected trading partners starting September 8, 2025. The exemptions include metals (including gold), as well as pharmaceuticals and chemicals, which could lead to increased cross-border trade flows, thereby indirectly supporting gold demand.