Gold prices soared to an all-time high on Tuesday, positioning the precious metal for its largest monthly gain in 14 years. Investor concerns over a potential US government shutdown, coupled with rising expectations for additional Federal Reserve rate cuts, have driven demand for this safe-haven asset.
In September alone, gold has surged 11.4%, on track for its strongest month since August 2011, when it rose 15% amid heightened market uncertainty. In India, the price of 24-carat gold (10 grams) touched a new peak of Rs 1,15,450, according to the India Bullion and Jewellers Association (IBJA).
In the US, gold futures for December delivery rose 0.4% to $3,872, as political deadlock threatened a government shutdown. Talks at the White House between President Donald Trump and Democratic leaders yielded little progress, raising concerns about disruptions to economic data releases, including the September jobs report.
Market sentiment has been further influenced by expectations of further easing by the Federal Reserve, with traders pricing in an 89% likelihood of a 25-basis-point rate cut at the next meeting, according to CME Group’s FedWatch tool. St. Louis Fed President Alberto Musalem cautioned that while the Fed may consider more cuts, rates need to remain high enough to keep inflation in check.
Gold has consistently outperformed Indian equities, marking its fourth consecutive Diwali-to-Diwali cycle of better returns. Silver has also performed well, driven by industrial demand in solar panels, semiconductors, and electric vehicles. Analysts note that strong central bank purchases and sustained ETF inflows continue to support bullion prices.
Investors are now watching closely for upcoming US economic indicators, including job openings, private payrolls, ISM manufacturing data, and the non-farm payrolls report, which could influence the trajectory of gold and broader markets.
