Gold prices surged dramatically on Tuesday, reaching a record high of Rs 1,17,561 per 10 grams in the domestic futures market. This rise came as investors reacted to fears surrounding a possible US government shutdown and the looming prospects of further interest rate cuts by the Federal Reserve.
On the Multi Commodity Exchange (MCX), gold futures for December delivery climbed by Rs 1,217 or 1.04 percent, marking their fourth consecutive session of gains. The increase reflects a growing appetite for safe-haven assets among investors concerned about economic stability.
Additionally, the February 2026 gold futures contract also jumped, rising Rs 1,314 or 1.12 percent to hit Rs 1,18,788 per 10 grams. Silver prices followed suit, with December futures up by Rs 1,101 or 0.77 percent, achieving Rs 1,44,200 per kilogram.
Market analysts attribute this boost in precious metal prices to a pronounced safe-haven demand, driven by uncertainties surrounding the US economy and ongoing tariff discussions. Rahul Kalantri, Vice-President of Commodities at Mehta Equities Ltd., stated, “Gold and silver extended their bullish momentum as safe-haven demand surged amid concerns over a potential US government shutdown, and expectations of further Fed rate cuts are driving precious metal prices higher.”
Globally, gold also made headlines by reaching an all-time high of USD 3,895.22 per ounce, while silver traded at USD 47.41 per ounce. Jigar Trivedi, Senior Research Analyst at Reliance Securities, highlighted the sentiment, noting, “Gold prices rose to a fresh record high of USD 3,895 per ounce, heading for their biggest monthly gain in 14 years, as investors rushed to safe-haven assets amid mounting concerns over a looming US government shutdown.”
September proved to be a particularly strong month for the yellow metal, with futures gaining over 11 percent thus far. This increase is largely linked to fears of a US government shutdown, which threatens to disrupt economic reporting and administrative functions. Talks between US President Donald Trump and congressional leaders yielded no agreements on short-term funding as of Monday, raising the risk of a shutdown when funding expires.
Market analysts warn that if no agreement is reached, the shutdown could commence on Wednesday, potentially leading to delays in critical economic data releases, including the September nonfarm payrolls report. Trivedi emphasized, “If a shutdown begins, it will likely complicate the release of key economic data that investors rely on for decision-making.” Additionally, new tariffs on heavy trucks, patented drugs, and other imports are set to take effect, further inciting market volatility.
Furthermore, recent US macroeconomic data reinforced the belief that the Federal Reserve might implement additional interest rate cuts in its upcoming meetings, contributing to the favorable environment for gold and silver investments.
In an impressive display of investment flow, gold exchange-traded funds attracted approximately USD 10.5 billion in September alone, pushing total inflows for the year to an impressive USD 50 billion. Renisha Chainani, Head of Research at Augmont, explained, “As investors piled into safe-haven assets amid global economic and political uncertainty, the demand for gold continues to rise, reflecting the precious metal’s enduring appeal in turbulent times.”
As global markets continue to react to both political and economic developments, the ascent of gold prices serves as a barometer for investor sentiment toward risk. With the current trajectory, analysts suggest potential further increases in gold prices amidst ongoing uncertainty.
