Gold prices in India surged to an unprecedented Rs 1,17,561 per 10 grams on Tuesday, reflecting a climb of Rs 1,217. This rise indicates heightened investor interest as fears of a looming US government shutdown loom alongside expectations of further interest rate cuts by the Federal Reserve.
As trading at the Multi Commodity Exchange (MCX) unfolded, December gold futures marked their fourth consecutive session of gains, showcasing an increase of 1.04 percent. Concurrently, February 2026 contracts for gold futures also reported a significant uptick, crossing the Rs 1,18,788 mark with an increase of 1.12 percent.
Not just gold, silver prices reached new highs as well. Silver futures for December delivery hopped to Rs 1,44,200 per kilogram, gaining Rs 1,101 or 0.77 percent, while March 2026 contracts for silver saw an increase of Rs 1,127, hitting Rs 1,45,858 per kilogram.
Rahul Kalantri, Vice-President of Commodities at Mehta Equities Ltd, noted, “Gold and silver extended their bullish momentum as safe-haven demand surged amid concerns over a potential US government shutdown.” He elaborated that this situation, combined with expectations of further tariff measures and new Federal Reserve rate cuts, is the primary force driving precious metal prices higher.
In global markets, gold futures also achieved historic highs, reflecting similar trends. December delivery futures climbed over 1 percent to reach USD 3,895.22 per ounce. Silver followed suit, inching up to USD 47.41 per ounce.
Jigar Trivedi, a Senior Research Analyst at Reliance Securities, commented, “Gold prices have seen a remarkable rise, approaching their biggest monthly gain in 14 years, driven by investor interest in safe-haven assets due to mounting worries about a potential US government shutdown.” The precious metal has already risen more than 11 percent this September alone.
The backdrop to this surge includes stalled negotiations between President Donald Trump and congressional leaders. Talks ended Monday without consensus over short-term funding, increasing the likelihood of a government shutdown when existing funding expires at midnight on Tuesday.
“Failure to reach an agreement would initiate a shutdown starting Wednesday, delaying crucial economic data releases, including the September nonfarm payrolls report,” said Trivedi.
Adding further trepidation, new US tariffs on heavy trucks, patented drugs, and various items are scheduled to take effect. Trivedi remarked, “Last week’s US macroeconomic data has fortified expectations that the Federal Reserve may implement additional rate cuts in their remaining meetings this year.”
Investor interest in gold exchange-traded funds (ETFs) surged, with inflows reaching approximately USD 10.5 billion in September alone. This brings total inflows for the year up to about USD 50 billion, as a growing number of investors turn towards gold, driven by global economic and political uncertainty.
Conclusively, as the global economic landscape shifts, many are likely to consider gold not merely as a commodity but as a critical asset in asset protection strategy amidst financial turbulence.
