Gold prices surged Rs 723 on Tuesday, touching an all-time high of Rs 1,10,312 per 10 grams in the domestic futures market, as expectations of a US Federal Reserve rate cut and a weakening dollar boosted demand for the precious metal.
On the Multi Commodity Exchange (MCX), December gold futures rose 0.65% to hit a fresh peak, while the most traded October contracts jumped Rs 982 or 0.9% to Rs 1,09,500 per 10 grams.
Traders attributed the rally to weak US labour market data, which strengthened bets on monetary policy easing. Markets are now pricing in three Fed rate cuts this year, including a likely 25-basis point cut next week.
“Gold hit a fresh all-time high, supported by mounting expectations of Federal Reserve rate cuts through year-end,” said Jigar Trivedi, Senior Research Analyst at Reliance Securities.
Global cues also contributed to the surge. Comex gold futures hit a record USD 3,698.02 per ounce, while spot gold touched USD 3,658.38 per ounce.
“Gold has started the week on a bullish note, with investors confident the Fed will cut rates at its September meeting,” said Renisha Chainani, Head of Research at Augmont.
Exchange-traded funds (ETFs) added 53 tonnes of gold in August, worth roughly USD 5.5 billion, taking their holdings close to pandemic-era highs. Additionally, China’s central bank raised its gold reserves for the tenth consecutive month, diversifying away from the dollar.
Analysts also pointed to geopolitical tensions — including possible new US sanctions on Russia — as factors driving safe-haven demand.
