Gold prices hit record high amid US shutdown fears and festive demand in India

Mumbai: Gold extended its rally to a historic peak this week, with global and Indian markets witnessing unprecedented highs.

Bullion briefly touched an all-time high of $3,839.52 an ounce on Tuesday, fuelled by concerns over a looming US government shutdown and uncertainty surrounding the Federal Reserve’s next interest rate decision. Investors turned to gold and US Treasuries as safe assets, with lower bond yields and a weaker dollar further supporting the rally.

The political deadlock in Washington heightened market jitters after talks between top congressional leaders and President Donald Trump ended without agreement on short-term funding. Analysts warned that a shutdown could delay key economic data releases, complicating the Fed’s assessment of the US economy ahead of its policy meeting.

Meanwhile, the world’s two largest gold producers saw leadership changes. Newmont Corp. announced CEO Tom Palmer will step down on December 31, while Barrick Mining Corp. surprised markets with the resignation of Mark Bristow.

Gold prices have already surged more than 45% this year, backed by central bank purchases and expectations of renewed US rate cuts. Holdings in bullion-backed ETFs reached their highest level since 2022, with major banks including Goldman Sachs and Deutsche Bank predicting further gains.

In India, festive demand amplified the rally. On September 30, 24-carat gold crossed ₹1,16,000 per 10 grams for the first time, while silver surged past ₹1,50,000 per kg. Over four days, gold gained nearly ₹2,000 per 10 grams, marking four consecutive sessions of price increases. The Multi Commodity Exchange (MCX) gold contract for December 2025 expiry touched a record ₹1,16,497 per 10 grams.

Analysts say the outlook for gold and silver remains bullish, supported by expectations of another US rate cut, RBI policy updates, and seasonal demand. While gold has climbed 60% since January 2024, experts highlight silver’s potential for sharper gains due to its stretched gold-to-silver ratio.