Gold prices shattered all previous records this week, climbing past ₹1.22 lakh per 10 grams on the Multi Commodity Exchange (MCX) for the December 2025 contract — the highest-ever level seen in India.
Globally, spot gold crossed $4,000 per ounce for the first time, extending its remarkable 52% year-to-date rally. Silver, too, joined the surge, touching ₹1.47 lakh per kg on the domestic market.
The rally highlights a global rush toward safe-haven assets amid heightened economic uncertainty, geopolitical tensions, and expectations of US interest rate cuts.
What’s Fueling the Gold Rally?
A combination of global and domestic factors has pushed gold to uncharted territory:
- Central Banks Are Accumulating Gold
Several central banks, including the People’s Bank of China, have been steadily adding to their gold reserves. This ongoing accumulation helps diversify currency exposure and has boosted global demand.
- Expectations of US Rate Cuts
Markets now expect the US Federal Reserve to begin cutting interest rates later this year. Lower rates reduce the appeal of interest-bearing assets, making gold — a non-yielding store of value — more attractive.
- Global Economic Uncertainty
Concerns about a US government shutdown, slower global growth, and ongoing geopolitical risks in Europe and Asia have pushed investors toward safe-haven assets like gold.
- Festive Season Demand in India
Domestically, India’s gold imports nearly doubled in September as jewellers and banks replenished stocks ahead of the festive and wedding season, traditionally a strong period for gold demand.
- Strong ETF and Retail Buying
Gold-backed exchange-traded funds (ETFs) have seen steady inflows this year. Retail investors are also showing renewed interest in gold as part of their diversified portfolios.
How Global Factors Are Influencing Prices
- Weaker US Dollar: A softer dollar has made gold cheaper for investors holding other currencies.
- Central Bank Purchases: Global central banks have purchased gold for the 11th straight month.
- Safe-Haven Flows: Uncertain global growth and elevated geopolitical risks continue to drive demand for gold.
The Bigger Picture
Gold’s rally isn’t just a short-term surge — it reflects broader trends of global uncertainty, shifting monetary policies, and renewed demand from institutional and retail buyers alike.
With prices up over 50% this year after a 27% gain in 2024, the metal continues to underscore its role as a store of value during volatile times.
Bottom Line
Gold’s record-breaking run to ₹1.22 lakh/10 gm shows how global and domestic factors are converging — from central bank buying to festive demand in India.
While prices are at unprecedented highs, the rally also reflects investors’ search for safety amid global uncertainty. For now, gold continues to glitter brighter than ever in 2025.
