Gold futures rising by Rs 651 (0.54 per cent) to reach Rs 1,20,900 per 10 grams, touching sky high amid the festival time of Karwa Chauth and Dhanteras. On the other hand silver futures increased by Rs 281 (0.19 per cent), close to their record level of Rs 1,47,800 per kilogram.
In the country where ocassions like child birth announcement, new home purchase, weddings, festivals are associated with buying, gifting gold and silver, people are now setlling for ready-made hampers or traditional sweets, again.
Driven by global economic and political uncertainties in the US and anticipated Federal Reserve rate cuts, prices might go more higher than it already is. Since the last 5 years, gold prices are increasing continuously, investors are also shocked due to the uncertainty.
According to the experts following reasons can be the main cause behind the price hike:
1. Central Banks maintaining GOLD RESERVES
- According to data from the World Gold Council, central banks across the world have almost doubled their gold reserves over the past decade. This shows their growing confidence in gold as a stable and profitable investment. Even the Reserve Bank of India (RBI) has consistently increased its gold reserves amid global uncertainty.
2. Interest Rate Cuts:
- Another major reason behind the recent rise in gold prices is the U.S. Federal Reserve’s decision to cut interest rates by 25 basis points in September 2025. If the U.S. labor market data continues to weaken, another rate cut could follow soon. Lower interest rates in the U.S. generally weaken the dollar, which pushes gold prices higher as investors move towards safer assets like gold.
3. Geopolitical Tensions
- Global instability has always been a key driver of rising gold prices – and the past five years have been particularly challenging. The COVID-19 pandemic in 2020 severely impacted the global economy. Later, the Russia-Ukraine war in 2022, the Israel-Hamas conflict in 2023, and the ongoing military tension between Israel and Iran this year have all intensified geopolitical uncertainty, further fueling gold’s rise.
4. Increasing demand in India and China
- The price of any metal or commodity largely depends on its demand – and gold is especially demand-sensitive. India and China are the world’s largest consumers of gold, and demand in both countries remains strong. According to metals experts at Heraeus, despite higher gold prices, imports of the metal continue to grow in both nations.
Interestingly, during the first half of this year, India’s gold jewelry demand surpassed China’s. As per the World Gold Council, in the six months ending June, India’s jewelry demand rose by 6% to 563 tonnes, compared to 511 tonnes in China (including Hong Kong and Taiwan).
Further, political instability in France and Japan has increased demand for safe-haven assets like gold. Investment remains strong, with gold ETFs up 17% and silver ETFs up 16% this year. Despite record highs, analysts expect festive demand, global cues, and a weaker rupee to keep supporting MCX gold prices.
No matter whether you invest now or not. One thing we wish for you this Diwali:
May Goddess Laxmi bring lots of good health, prosperity, peace and wealth to your families…