Why Are Gold Prices Reaching Record Highs?
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Synopsis
Gold prices have soared to unprecedented levels amid rising safe-haven demand fueled by global tensions and anticipated rate cuts by the US Federal Reserve. Discover the implications of these trends and what they mean for investors and consumers alike.
Key Takeaways
- Gold prices have hit record highs due to safe-haven demand.
- Current price per 10 gm varies significantly across major cities in India.
- Silver prices are also on the rise due to industrial demand.
- Geopolitical tensions are influencing market trends.
- US Federal Reserve rate cut expected to impact gold prices further.
New Delhi, Sep 16 (NationPress) Gold prices have hit an all-time high on Tuesday, exceeding the Rs 1,10,000 threshold driven by heightened safe-haven demand in response to global geopolitical uncertainties and the expectation of a US Federal Reserve rate cut scheduled for this week.
As of 10:17 am, the price of 24-carat gold per gram in India was recorded at Rs 10,951, based on data from the India Bullion and Jewellers Association (IBJA).
Earlier today, gold prices peaked at Rs 1,10,650 per 10 grams, a rise from Rs 1,09,820 on Monday. According to the World Gold Council, spot gold was trading at $3,679 an ounce, just below Monday’s high of $3,685.
Experts attribute this price surge to escalating geopolitical risks affecting global trade and the anticipated rate cut by the US Federal Reserve on September 17. With a declining dollar providing additional momentum, analysts expect both gold and silver to perform well this week.
The domestic market prices for gold are as follows: Rs 1,10,260 per 10 gm in New Delhi, Rs 1,10,450 in Mumbai, Rs 1,10,540 in Bengaluru, and Rs 1,10,310 in Kolkata. Chennai reported the highest gold price at Rs 1,10,770.
Silver prices also saw an increase, with October 5 futures on MCX trading at Rs 1,29,452 per kg.
Moreover, analysts have connected the ongoing price rally to the growing industrial demand for silver, particularly from the EV and solar sectors. Current forecasts suggest a 96.4% chance of a 25-basis-point rate cut in the upcoming US Federal Reserve meeting.
Additionally, India’s gold exchange-traded funds (ETFs) recorded net inflows of $233 million in August 2025, a significant 67% increase from the $139 million seen in July, as reported by the World Gold Council.
In the most recent August inflation report, gold played a crucial role in maintaining high core inflation, contributing to a 40% year-over-year price increase that added nearly 43 basis points to the CPI.
Point of View
It is essential to recognize the significant impact of geopolitical tensions and economic forecasts on gold prices. The recent surge reflects both investor sentiment and market dynamics, which are critical for understanding the broader financial landscape. It is vital to remain informed about these developments as they shape the economy.
NationPress
16/09/2025
Frequently Asked Questions
What is driving the recent surge in gold prices?
The surge in gold prices is primarily driven by increased safe-haven demand amid global geopolitical tensions and expectations of a US Federal Reserve rate cut.
What are the current prices of gold in India?
As of now, prices in India vary by city, with New Delhi at Rs 1,10,260 per 10 gm, Mumbai at Rs 1,10,450, Bengaluru at Rs 1,10,540, Kolkata at Rs 1,10,310, and Chennai at Rs 1,10,770.
How are silver prices performing?
Silver prices have also increased, with October 5 futures on MCX trading at Rs 1,29,452 per kg, attributed to rising industrial demand.
What can investors expect moving forward?
Investors can expect continued volatility in gold and silver prices, particularly with the potential for a US Federal Reserve rate cut and ongoing geopolitical challenges.
What impact does gold have on inflation?
Gold remains a significant factor influencing core inflation, contributing to a notable increase in the Consumer Price Index (CPI) due to its price volatility.
