Gold hits historic peak at ₹1.04 lakh on MCX, check key reasons behind the rally

Gold prices are trading at an all-time high in India. On Monday, gold opened at around ₹1,04,044 per 10 gm in Ahmedabad on the Multi-Commodity Exchange (MCX). In international markets, gold futures closed above $3,500 per troy ounce for the first time. However, gold in the global market is currently trading at around $3,477 per ounce as of 11:00 AM IST

Darshan Desai, CEO of Aspect Bullion & Refinery, said that gold prices remain near record highs amid ongoing uncertainty surrounding U.S. President Donald Trump’s reciprocal tariffs following a recent court ruling, as well as concerns about the American central bank’s independence. "With the U.S. markets closed for a holiday, global cues are limited, shifting the focus to the Indian rupee. Its continued depreciation has led to elevated domestic gold prices. Meanwhile, domestic buying is expected to pick up ahead of the shraddh period, which begins on September 7," said Desai.

Several factors have contributed to the increase in gold prices, including rising rate cut expectations, tensions between Israel and Gaza, and other geopolitical tensions, as well as tariff escalations, which have consistently supported buying bullion.

"As increased expectations of a U.S. Federal Reserve interest rate cut this month lifted bullion's allure. U.S. consumer spending increased solidly in July, while underlying inflation picked up as tariffs on imports raised the prices of some goods. However, this data will likely not prevent the Fed from cutting interest rates this month," said Manav Modi, Analyst – Precious Metals Research, Motilal Oswal Financial Services Ltd.

Besides, the increase in festive and wedding demand, ETF buying, and increased premiums in China are some of the additional factors supporting gold’s bull run. Analysts also cite global economic uncertainty and a weakening rupee as key factors behind the continued rise in precious metal prices.

"The Indian rupee weakened significantly against the dollar, hitting an all-time low, which further drove up local bullion prices," said Rahul Kalantri, VP-Commodities, Mehta Equities Ltd.