Gold prices hit all-time high: Here we decode why
What's the story
Gold prices on the Multi Commodity Exchange (MCX) have hit an all-time high of ₹1,12,419 per 10g today. The surge comes amid positive global cues and ongoing concerns over tariff-related issues under US President Donald Trump. Today, October futures for MCX Gold were trading at ₹1,12,397 per 10g while December futures for MCX Silver were at ₹1,33,389 per kg.
Market factors
Factors driving gold prices
The unprecedented rise in gold prices this year can be attributed to a number of factors. These include global uncertainties, strong retail demand, aggressive central bank purchases, rate cut expectations, and a weaker US dollar. In India, spot gold prices have shot up by 47% this year alone. The ongoing festive season is also contributing to the surge in gold prices.
Expert insights
What experts say
Rahul Kalantri, the VP of commodities at Mehta Equities, said the US Federal Reserve's 25 basis points rate cut and expectations of more easing by year-end have improved gold sentiment. He added that a weaker dollar index and rupee have also contributed to this trend. Persistent central bank buying, the strong ETF inflows, and safe-haven buying have further strengthened precious metals like gold in the market.
Global impact
Global gold prices
On the global front, the dollar index has fallen by over 0.10% to 97.20. This makes bullion cheaper in other currencies and boosts its demand. The market is expecting two more rate cuts this year, with a 90% chance of a 25-basis-point cut in October and a 75% chance of another cut in December, according to Reuters's CME FedWatch tool.
Market outlook
Gold well supported at current levels
Aksha Kamboj, VP of the India Bullion and Jewellers Association (IBJA), noted that instead of correcting, gold prices have continued to rise. She said buyers seem to be holding onto their positions rather than selling off. "There may be profit booking; however, the general view is one of positive momentum," Kamboj said. "Gold seems well supported at current levels."