Comex Gold futures gained more than 12% in the past month to reach an all-time high above $3,824.6 per ounce. This came as the U.S. Federal Reserve delivered its first interest rate cut of 2025 at the September meeting, while signaling further reductions ahead amid a softening labour market. Markets are now pricing in nearly two additional 25-basis-point cuts at the remaining meetings this year. MCX gold also made its highs of over ₹1,14,100 per 10 grams.

The recent rally in gold is supported not only by expectations of continued monetary easing but also by a weakening U.S. dollar, which slipped to its lowest level since February 2022. Safe-haven demand, ongoing geopolitical tensions, and strong central bank purchases have further reinforced the upward momentum.

The metal briefly corrected about 2% following Fed Chair Jerome Powell’s cautious press conference remarks. Powell characterised the September cut as a “risk-management” move, emphasising a data-dependent path. The Fed’s updated dot plot projects a year-end target range of 3.50–3.75%, signalling an additional 50 bps of easing.

In early September, gold broke out of a five-month consolidation zone near $3,500 as investors sought safety amid policy uncertainty. Chinese demand was particularly strong, with net gold imports via Hong Kong surging 126.8% in July from June. Global gold ETFs posted their third consecutive month of inflows in August. Recently, SPDR Gold Shares, the world’s largest gold ETF, recorded its biggest single-day inflow on record, exceeding 18 tonnes.

Moreover, macroeconomic conditions have created an increasingly favourable environment for bullion. U.S. GDP expanded 3.3% in Q2, but labour market cracks are becoming more apparent. Jobless claims have reached a four-year high, and payroll revisions marked the first monthly job loss in more than four years. Meanwhile, consumer prices posted their strongest monthly gain in seven months, stoking stagflation concerns. The Fed’s preferred inflation gauge, the core PCE index, rose 0.2% in August, in line with expectations, bringing the annual increase to 2.9%. This moderation keeps Fed on path for more rate cuts in 2025.

Political and geopolitical factors further enhance the metal’s safe-haven demand as U.S. political developments, including a federal appeals court ruling against Trump-era tariffs, investigations into Fed Governor Lisa Cook, and broader scrutiny of central bank independence, have weighed on dollar confidence. On the global front, escalating Middle East conflicts, persistent Russia–Ukraine tensions, and evolving U.S.–EU trade measures have added to uncertainty, driving flows into hedging assets.

Elsewhere, the People’s Bank of China added to its reserves for the tenth straight month in August, raising holdings to 74.02 million ounces. Beijing’s push to establish the Shanghai Gold Exchange as a custodian of foreign sovereign reserves underscores its strategy to elevate its role in global bullion markets while reducing reliance on the dollar.

Year-to-date, gold has surged over 43%, setting it on track for its strongest annual rally since 1979. This sharp rise reflects growing investor concerns over U.S. fiscal sustainability, persistently high inflation, and potential threats to central bank independence, all of which continue to fuel structural demand for bullion. Looking ahead, gold is expected to remain well-supported by anticipated Federal Reserve easing, consistent central bank purchases, and ongoing geopolitical risks. However, intermittent pullbacks may occur as any significant rebound in labor market and/or sharp increase in price pressures may prompt markets to recalibrate rate cut expectations. 

On the technical front, Comex gold holds key support at $3,710, with further downside risks toward $3,600–3,555 if breached, while momentum above $3,800 could drive fresh highs at $3,860–$3,950. On MCX, ₹110,500 is the key support level — if prices fall below this, it may decline further towards ₹107,870 or ₹106,350. On the upside, a breakout above ₹114,200 could spark a rally towards ₹115,200 and ₹117,800.

Silver, too, has posted a remarkable rally, surging over 19% last month alone to nearly $46 per ounce, marking a new 14-year high. This move has been largely driven by the Fed’s measured rate cuts and the market’s expectations of a gradual and prolonged easing cycle. In addition, silver’s bullish narrative is underpinned by persistent structural supply deficits, now in their fifth consecutive year according to the Silver Institute. Strong industrial demand, particularly from the solar energy sector, electric vehicles, and electronics, continues to reinforce the positive long-term outlook.

Investor sentiment towards silver remains robust, as reflected in rising ETF inflows. Holdings in the SLV fund have surpassed 15,000 tonnes, while total ETP holdings climbed to 1.13 billion ounces in the first half of 2025, nearing the peaks last seen in 2021. Furthermore, the U.S. government’s recent addition of silver to its critical minerals list has pushed lease rates higher, signaling a tightening supply environment.

In the near term, silver prices may experience some volatility in response to global monetary policy cues. Nonetheless, persistent supply constraints and resilient industrial demand are likely to keep the metal on a strong upward trajectory with a strong possibility of Silver testing $50 per ounce in the months ahead.