Mumbai: Gold prices surged to a record high on Wednesday, crossing Rs 1.27 lakh per 10 grams on the Multi-Commodity Exchange (MCX).

The rise was driven by renewed US-China trade tensions and growing expectations of further interest rate cuts by the US Federal Reserve.

At the opening, MCX gold futures were up 0.52 per cent at Rs 1,26,915 per 10 grams, compared to the previous close of Rs 1,26,256. Prices soon touched a fresh all-time high of Rs 1,27,500 per 10 grams.

Silver prices also advanced, opening 0.18 per cent higher at Rs 1,59,800 per kg and reaching an intra-day peak of Rs 1,61,418. In early trade, gold was trading 0.46 per cent higher at Rs 1,26,835 per 10 grams, while silver gained 0.52 per cent to Rs 1,60,333 per kg.

In the international market, gold remained near record levels, supported by safe-haven demand. Spot gold rose 0.4 per cent to $4,155.99 per ounce, while US gold futures for December delivery were up 0.3 per cent at $4,174.30 per ounce.

Gold has gained nearly 55 per cent so far this year, hitting an all-time high of $4,179.48 on Tuesday. Analysts attribute the rally to a combination of global uncertainties, expectations of US Fed rate cuts, strong central bank purchases, a global shift away from the dollar, and steady inflows into gold exchange-traded funds (ETFs).

Federal Reserve Chair Jerome Powell said on Tuesday that future rate decisions would be taken on a “meeting-by-meeting” basis, balancing inflation concerns with signs of a weakening labour market. Investors now expect a 25-basis-point rate cut at the upcoming Fed meeting, with another likely in December.

Adding to gold’s momentum, US-China trade tensions have escalated. US President Donald Trump said Washington is considering cutting some trade ties with China, including in cooking oil, after both countries imposed new port fees on each other this week.

Experts say the combination of geopolitical uncertainty, policy easing expectations, and ongoing market anxiety, including the potential US government shutdown, is driving investors toward gold as a safe haven, pushing prices to record highs.

IANS