Gold touches record ₹1.2 lakh as global uncertainties fuel safe-haven rush

Gold prices hit a record high of ₹1,19,933 in Ahmedabad on the Multi-Commodity Exchange (MCX) on Monday, after opening at ₹1,18,900 per 10 grams. In international markets, gold futures are trading at around $3,926 per troy ounce as of 12:00 IST. Silver prices also extended their rally, reaching a peak of ₹1,47,700 on the MCX and $48.47 in international markets.

Darshan Desai, CEO - Aspect Bullion & Refinery, "Gold prices have climbed above $3,900 an ounce in global markets, as the ongoing U.S. government shutdown over the weekend delayed the release of important economic data and added to uncertainty about the economy. With gold already up more than 50% in 2025, a pullback would be seen as a healthy correction after such a strong rally. At these elevated levels, some investors may look to take partial profits, especially since the risk-reward for new positions doesn't look attractive right now. A dip could offer a better entry point for those looking to invest."

As mentioned above, gold prices have surged 50% this year to reach a record level of $3,965 (approximately ₹120,000), and Silver has surged 65% this year to touch $48.48 (approximately ₹147,500) due to safe-haven demand amid market uncertainty.  2025 has been the year of uncertainties - it started with political uncertainty, then tariff uncertainty, followed by geopolitical uncertainty, then rate cut uncertainty, and now US shutdown uncertainty. All these uncertainties have contributed to a phenomenal rise in bullion prices this year, driven by safe-haven demand.

Dr Renisha Chainani, Head - Research at Augmont, said, "A weaker dollar, robust central bank purchases, rising demand for gold-backed Exchange-Traded Funds, and growing interest from retail investors looking to hedge against rising trade and geopolitical tensions are all contributing factors. The demand for gold-backed ETFs, futures, and associated financial instruments is being supported by robust safe-haven flows, driven by concerns about de-dollarisation around the world. All of the major long-term bullish factors for the metal are still in place, particularly the continued decline in the USD and the robust central bank allocation."

There remains uncertainty surrounding the U.S. economy and the potential magnitude of any GDP damage resulting from the ongoing government shutdown in the United States. If President Donald Trump determines that talks with congressional Democrats to end a partial government shutdown are completely failing, the Trump administration will begin mass layoffs of federal employees.

After fiscal conservative Sanae Takaichi was chosen to head the ruling party and take over as prime minister, the yen has suffered its most significant decline versus the US dollar in five months. Gold was able to profit from the weakening of the yen following the Japanese LDP elections, which has left investors with one fewer safe-haven asset to turn to capitalise.

After the Senate failed to move forward with competing plans to extend federal funding on Friday, the US partial shutdown was prolonged into this week. "Investors are now forced to rely on alternative data that point to a weaker labour market because this has delayed important economic releases, such as the September non-farm payrolls report. Traders will be watching Federal Reserve officials' comments this week for additional hints about the central bank's policy stance, even in the absence of new data," said Chainani.