Gold prices today extended their historic rally, fueled by a mix of global economic uncertainty, geopolitical tensions, and expectations of US Federal Reserve rate cuts. On the Multi Commodity Exchange (MCX), gold surged to an unprecedented Rs1,20,900 per 10 grams on October 7, while silver hovered near record highs around Rs1,48,000 per kilogram.
In the international market, spot gold inched up 0.1% to $3,962.63 per ounce after touching a lifetime high of $3,977.19 earlier in the session. US gold futures for December delivery rose 0.2% to $3,985.30 per ounce, reflecting strong investor confidence in precious metals.
Why Gold Prices Are Rising?
Experts point to several triggers behind the surge. Geopolitical tensions, including political instability in France and Japan, have pushed investors towards safe-haven assets like gold and silver. Concerns over a potential US government shutdown and expectations of rate cuts by the Federal Reserve have further fueled the rally.
'Gold prices in India have surged to record levels due to global economic uncertainty, central bank buying, and a weaker dollar. Investors are flocking to safe-haven assets amid volatility,' said Jigar Trivedi, Senior Research Analyst at Reliance Securities.
Investment demand remains strong, with gold ETF holdings rising 17% and silver ETF holdings up 16% year-to-date, highlighting sustained investor interest. Analysts suggest that festive season demand and a weaker rupee could provide additional upside momentum for MCX gold prices.
Should You Buy or Sell Gold?
While gold’s bullish trend remains intact, experts advise caution. Trivedi recommends booking partial profits at current highs to manage risk exposure.
'Gold continues to act as a hedge against volatility. Investors should retain core holdings for long-term security and use dips as strategic re-entry points. Timing and allocation are key to maximising returns,' he explained.
Trivedi predicts that gold prices could potentially climb to Rs 1,25,000 per 10 grams by the end of the month. So far in 2025, gold has surged nearly 51%, while silver has outperformed with 68% returns.
Silver Prices and Trends
Silver’s rally is driven by strong industrial demand, a five-year supply deficit, a favourable gold-silver ratio, and expectations of Fed policy easing. According to Tata Mutual Fund, silver may outperform gold over the medium term (3-5 years), though short-term volatility remains a factor.
'Robust investment demand, a large supply deficit, and potential Fed rate cuts may continue to support silver prices. Silver’s growth is closely linked to industrial demand recovery, particularly from China,' the fund noted.
The fund expects gold prices to consolidate between $3,500 and $4,000 per ounce in the short term, offering a window for strategic investment decisions.
Gold and Silver Investment Strategy
Tata Mutual Fund advises investors to stay invested and accumulate on price declines triggered by short-term corrections. A balanced allocation between gold and silver, around 50:50, can optimise returns while mitigating risks.
'Gold remains a long-term hedge against inflation, geopolitical risks, and currency depreciation, while silver offers growth potential. Both metals present compelling opportunities in the current market environment,' the fund emphasised.
With record highs in gold and silver, investors are at a crossroads: take profits, hold, or strategically diversify. Market conditions suggest that a cautious but opportunistic approach could yield long-term stability and growth.
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