Gold prices surged to a record high of Rs 1,17,561 per 10 grams on Tuesday, driven by safe-haven demand as concerns over a potential US government shutdown loom. The escalating tension surrounding US economic stability and expectations of further interest rate cuts by the Federal Reserve significantly influenced this increase.
On the Multi Commodity Exchange (MCX), gold futures for December delivery rose by Rs 1,217, or 1.04%, marking the metal’s fourth consecutive day of gains. The February 2026 contract mirrored this trend, with prices climbing by Rs 1,314, or 1.12%, reaching a lifetime high of Rs 1,18,788 per 10 grams.
Silver also saw substantial growth, with December futures jumping Rs 1,101 or 0.77%, hitting an all-time high of Rs 1,44,200 per kilogram. Similarly, March 2026 silver futures rose by Rs 1,127, or 0.78%, reaching a peak of Rs 1,45,858 per kg.
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, added tariff measures, and expectations of further Fed rate cuts.” These factors have created a robust environment for precious metal prices.
On the global front, gold futures for December delivery also reached notable heights, with prices exceeding 1% to touch USD 3,895.22 per ounce. In comparison, silver gained marginally to achieve USD 47.41 per ounce.
Jigar Trivedi, Senior Research Analyst at Reliance Securities, emphasized that “Gold prices soared to a fresh record high of USD 3,895 per ounce, on track for their biggest monthly gain in 14 years, as investors flocked to safe-haven assets amid fears of a US government shutdown.” This remarkable rise represents an increase of more than 11% in gold prices so far this September.
The backdrop of these soaring prices includes growing anxieties surrounding US economic governance. Discussions between President Donald Trump and congressional leaders stalled on Monday, leaving little chance for a short-term funding resolution before the midnight deadline. If an agreement does not materialize, a government shutdown could commence on Wednesday, which would disrupt the release of vital economic indicators.
Trivedi explained, “If no agreement is reached, a shutdown would begin on Wednesday, potentially delaying the release of key economic data, including the September nonfarm payrolls report.” This uncertainty raises concerns about economic health and has likely fueled the rush to gold as a safe-haven asset.
In addition, new tariffs targeting heavy trucks, patented medications, and other sectors are set to be enacted Wednesday, adding further to market volatility. These developments have led traders and investors to gravitate towards gold and silver as protective measures for their portfolios.
Market analysts expect the Federal Reserve to consider additional interest rate cuts during its upcoming meetings. Trivedi remarked, “Last week’s US macroeconomic data reinforced bets that the Federal Reserve could deliver additional rate cuts at its two remaining meetings this year.”
Gold exchange-traded funds (ETFs) have attracted investment flows of approximately USD 10.5 billion in September, amplifying total inflows for the year to around USD 50 billion. Renisha Chainani, Head of Research at Augmont, highlighted this trend, stating, “Investors are increasingly choosing gold as a safe-haven asset amid ongoing global economic and political uncertainties.”
As gold continues to achieve historical price milestones, its allure as a safe-haven investment remains powerful, making it an essential asset in the current economic climate.
