Gold hits record ₹1.12 lakh, silver surges to 14-year high on Fed rate cut and geopolitical fears

Gold prices reached a record high of ₹1,12,230 in Ahmedabad on the Multi-Commodity Exchange (MCX) on Tuesday, after opening at ₹1,12,200 per 10 grams. In international markets, gold futures are trading at around $3,784 per troy ounce as of 16:00 IST. Silver prices also extended their rally, rising to a peak of ₹1,32,135 on the MCX and $42.57 in international markets.

Dr. Renisha Chainani, Head of Research at Augmont, said, “Gold touches a new record high of $3795 (around ₹112,500) and silver reaches a 14-year high of $44.40 (around ₹133,900), encouraged by expectations that the Fed may lower interest rates further this year. Last week, the Fed made its first rate cut of the year and hinted at more to come as the labour market deteriorates.”

Strong central bank purchases, consistent ETF inflows, and persistent geopolitical risks—such as the Russia-Ukraine conflict and the economic consequences of President Donald Trump's tariffs—have also supported safe-haven flows. For additional direction on the rates outlook, investors are now anticipating a new Fed speech and significant US inflation data this week.

Kaynat Chainwala, AVP Commodity Research, Kotak Securities, said, "Comex Gold broke out of the consolidation in early September and extended its rally to fresh record highs as investors sought safety amid heightened political and monetary uncertainty. Strong physical demand, led by a surge in China’s imports and sustained central bank buying, continues the rally."

The Federal Reserve’s first rate cut of the year, along with expectations of further easing, supported gold amid a weakening dollar that dropped to its lowest since February 2022. Additionally, geopolitical tensions from Middle East conflicts to Russia–Ukraine strikes increased safe-haven demand.

"U.S. economic data showed mixed signals of solid Q2 growth and resilient consumer spending, contrasting with weakening labour markets, surging jobless claims, and persistent inflation, which raises stagflation risks. Political challenges, including Trump's tariffs and tensions surrounding the Federal Reserve's independence, are also weighing on the dollar," said Chainwala.

Silver gained sharply as it climbed to a fresh 14-year high, supported by industrial demand and record ETF buying activity. In the near to medium term, Gold and silver remain supported by monetary easing, central bank accumulation, and geopolitical risks, suggesting sustained upward momentum despite occasional dips.