Gold shatters worldwide records: Inches towards ₹1.27 lakh in India, above $4,120 globally as safe-haven fever grips markets

Gold prices reached a record high of ₹1,26,930 in Ahmedabad on the Multi-Commodity Exchange (MCX) on Tuesday, after opening at ₹1,26,041 per 10 grams. In international markets, gold futures are trading at around $4,121.43 per troy ounce as of 11:50 IST. Silver prices also extended their rally, rising to a peak of ₹1,62,700 on the MCX and $51.61 in international markets.

"Gold prices continue to hit new records even though tensions in West Asia are easing, the US dollar is getting stronger, and the trade disputes between the US and China are calming down. Despite these developments, markets remain cautious because these issues are still fragile," said Darshan Desai, CEO - Aspect Bullion & Refinery. "As a result, many investors are playing it safe and continuing to invest in gold. Prices are likely to stay elevated as long as central banks keep buying gold and inflows into gold-backed ETFs remain strong. For investors who have already made significant gains, it may be a good time to consider taking some profits at these high levels."

Adding to it, Rahul Kalantri, VP Commodities, Mehta Equities Ltd., gold and silver prices opened the week with strong momentum, both surging to fresh all-time highs. Gold soared above $4,110.30 per ounce, while silver climbed to a record $52.24 per ounce. Prices were buoyed by safe-haven buying as the U.S. government shutdown continued, coupled with a major short squeeze in silver. With bearish sentiment largely subdued, the rally appears to have further room to run. Festive demand added huge premium for gold and silver in the domestic markets. The sharp intraday movements signal heightened volatility ahead, but also suggest very mature bull markets."

Most investors have considered it as a hedge against currency value decline and inflation. "The rally has been further boosted by demand from both the retail & institutional markets. Given India’s festive spending and heightened geopolitical risks, we expect the trend to retain the potential for a further hike. However, we will keep an eye on potential short-term corrections. From now on, we will likely see further volatility as global decisions about rates and the dollar affect the market," said Aksha Kamboj, Vice President, India Bullion & Jewellers Association (IBJA) and Executive Chairperson, Aspect Global Ventures.

On the other hand, silver has gained considerable attention lately from both industrial and investment sources due to tight supply and demand. Currently, the price of silver is above ₹162,000 per kg, and it has been steadily increasing in recent days. "Unlike gold, silver is more cyclical and reacts to global economic cycles more than gold. This offers silver upside potential but also greater risk. The recent halting of inflows for silver ETFs demonstrates the supply pressure. Silver could continue to outperform in the near future, but will have more fluctuations than gold," said Kamboj.