Gold prices reached a record high of ₹1,14,839 in Ahmedabad on the Multi-Commodity Exchange (MCX) on Wednesday, after opening at ₹1,14,549 per 10 grams. In international markets, gold futures are trading at around $3774.63 per troy ounce as of 12:00 IST.

Silver prices also extended their rally, rising to a peak of ₹1,35,353 on the MCX and $44.7 in international markets, as traders reevaluated the Federal Reserve's stance in response to reasonable comments made by Chair Jerome Powell.

Aksha Kamboj, Vice President, India Bullion & Jewellers Association (IBJA) and Executive Chairperson, Aspect Global Ventures, says, "Recently, gold has kept rising, aided by America’s growing expectation of interest-rate cuts and subsequent dollar weakness."

Domestic demand has also picked up due to festival season and safe-haven buying amid international trade concerns. The price for 24-karat is hovering ₹114,314 per 10 grams, fairly considerably from weeks prior.

Analysts see this partly as a reflection of international expectations around recession and the Fed through local factors like rupee depreciation. Although traders are surprised by record prices, there is some growing concern about profit-booking if inflation data from the globe disappoints or a deferred rate cut is sighted. Current trends are bullish.

Kaynat Chainwala, AVP Commodity Research, Kotak Securities, says, "Spot gold surged to a fresh record of $3,791.1/oz on yesterday, driven by reports that China is positioning itself as a custodian of foreign sovereign gold reserves and growing expectations of more rate cuts in 2025."

According to Chainwala, NATO’s warning to Russia over airspace violations, strong ETF inflows, and concerns over Federal Reserve independence also underpinned gold. However, prices saw a modest pullback to $3,751/oz before closing at $3,764/oz following remarks from Fed Chair Powell, who cited that rising downside risks to employment outweigh concerns over stubborn inflation, prompting a decision to cut rates in September and marking a shift toward a more neutral policy stance.

Powell acknowledged inflation remains elevated but suggested tariff-related pressures could be short-lived, reinforcing the Fed’s data-dependent approach. However, Powell warned that it is still unclear when rates will be lowered, emphasising the Fed's difficulty in striking a balance between indicators of labour market weakness and inflation management. He added that there is still an opportunity for a less restrictive approach because tariff-driven inflation has so far been on the lower end of projections.

"Today, gold fell below $3,760 earlier as investors booked profits after the record high, though prices have since edged higher and currently trade above $3,770 as markets assess Powell’s cautious stance and await key U.S. inflation and jobs data," she added.

"The Fed's favourite inflation indicator, the August PCE index, and future comments by other Fed members will now be the focus of attention in search of additional clues," added Dr. Renisha Chainani, Head - Research at Augmont.