Rate cuts, rupee, and rage: What's behind the gold rush?
Gold prices soared to an unprecedented milestone on September 1st, 2025, with October gold futures on the Multi Commodity Exchange (MCX) hitting a record ₹1,05,937 per 10 grams. Silver joined the rally too, adding shine to what has become a landmark day for bullion markets.
Spectacular Year-to-Date Gains in 2025
The surge isn’t just a one-day wonder, it reflects gold’s spectacular run through 2025. From around ₹80,000 per 10 grams in January, gold prices has leapt over 33% year-to-date, smashing through the ₹90,000 level in March and breaching the ₹1 lakh psychological mark in August.
Globally, the story is just as dazzling: Comex gold futures touched $3,552.32 per ounce, while international spot gold has surged nearly 40% since January, far outpacing stock markets. The NSE's Nifty 50, by comparison, has managed just a 3.19% gain this year.
What’s Driving This Rally?
A cocktail of macroeconomic and geopolitical factors has fueled the historic rise.
- Federal Reserve Rate Cut Hopes: Investors are betting big on the US Fed easing rates in September, with market odds of a cut standing at 87%. Lower rates reduce the cost of holding non-yielding gold, driving up demand.
- Geopolitical Uncertainty: Conflicts in the Middle East, tariff tensions, and political instability have sent investors flocking to gold as a safe haven.
- Weak Dollar: The US Dollar Index has slid nearly 8% this year, making gold cheaper for global buyers.
- Central Bank Buying: Heavy accumulation by central banks—including China, India, and Turkey—has added significant support, with 166 tonnes purchased in Q2 alone.
- Inflation Concerns: Persistently high inflation and fears of currency debasement have further bolstered gold’s appeal.
What Analysts Are Saying
Experts remain broadly bullish. Goldman Sachs forecasts gold prices at $3,700 per ounce by year-end, while J.P. Morgan sees potential for $4,000 by 2026. Dr. Renisha Chainani of Augmont even suggests gold could reach ₹1.20 lakh per 10 grams in India by December if risks persist.
Technicals also paint a positive picture. Gary Wagner from TheGoldForecast.com notes a breakout pattern pointing toward higher levels, while Axis Securities says MCX gold remains strongly placed above its key moving averages.
However, some contrarians warn of caution. Morningstar’s Jon Mills projects a long-term decline if supply rises and demand normalizes, estimating prices could retreat by nearly 40% over five years.
How Long Will the Surge Last?
For now, momentum favors the bulls. With festive demand in India, continued central bank buying, and unresolved trade disputes, analysts believe gold’s rally may extend through the end of 2025. Near-term targets of ₹1.10 lakh on MCX and $3,800 globally are now firmly in sight.
