Gold prices surged to a fresh all-time high on Monday, driven by growing expectations of further interest rate cuts by the US Federal Reserve and sustained
demand for the metal as a safe-haven asset amid a weakening dollar. Spot gold climbed to $4,383.73 in early trade after new US economic data pointed to continued softness in the labour market. Cooling inflation trends have reinforced market expectations that the Federal Reserve could pursue additional monetary easing in the coming months. The rally pushed gold past its previous record of $4,381.52, set in October. The Federal Reserve delivered a quarter-point rate cut last week, fuelling hopes of more easing ahead. Markets are now pricing in at least two US rate cuts in 2026, a scenario that tends to support non-yielding assets such as gold. Gold, widely viewed as a hedge during periods of economic and geopolitical uncertainty, has surged 67% so far this year. Analysts attribute the sharp rise to a combination of persistent global trade and geopolitical tensions, strong purchases by central banks, and expectations of lower interest rates next year. A softer dollar index has further boosted prices by making the metal more affordable for overseas buyers. The global rally has spilled over into domestic markets as well. MCX gold futures rose Rs 574, or 0.43%, last week to hit a lifetime high of Rs 1,35,590 per 10 grams on Thursday. This marked the fourth consecutive weekly gain and placed gold on track for its twelfth straight monthly rise. Explaining the recent momentum, Prathamesh Mallya of Angel One said to TOI, “Weak dollar, dovish Federal Reserve, and lower inflation data in the US triggered the momentum in gold prices in the recent week.” Silver, meanwhile, has outperformed gold in recent months. Prices of the white metal jumped 8.08% last Friday to a record Rs 2,08,603 per kilogram. Silver has gained more than 130% so far this year, supported by strong exchange-traded fund inflows and concerns surrounding yen carry trades amid expectations of a rate hike by the Bank of Japan. Looking ahead, market experts remain constructive on both precious metals but caution that near-term corrections cannot be ruled out. Pranav Mer said silver may see further upside, although valuations appear stretched. “We continue to maintain a positive view on gold and expect prices to rise further to Rs 1,40,000– Rs 1,45,000 by early next year, with support for reversal placed at Rs 1,29,000 per 10 grams,” he said. Disclaimer: Recommendations and views expressed by experts are their own and do not represent the views of the publication.
