Why Gold Prices Continue to Surge: Check Key Reasons

Gold extended its rally on Wednesday, October 15, nearing the $4,200 per ounce mark. A potent mix of anticipated US interest rate cuts, escalating geopolitical tensions, and a rush toward safe-haven assets has propelled the precious metal to record levels. Spot gold rose by 0.8% to $4,173.56 per ounce, after momentarily hitting a new all-time high of $4,186.68. Meanwhile, US gold futures for December delivery climbed 0.7% to $4,192.90 per ounce, reflecting strong investor sentiment across the board.

Gold has delivered a stunning 59% gain year-to-date, driven by:

• Aggressive central bank buying
• Steady ETF inflows
• The broader de-dollarisation trend
• Increased momentum trading from short-term investors

Domestic Gold Rates in India

In India, gold prices also mirrored the global trend:

• 24-karat gold: ₹12,889 per gram
• 22-karat gold: ₹11,815 per gram
• 18-karat (999 purity): ₹9,697 per gram

The domestic market has seen a 4.7% increase over the past three days, driven by global cues and strong retail demand.

Rate Cut Expectations Fuel Rally

Investors are increasingly convinced that the US Federal Reserve is poised to cut interest rates. Fed Chair Jerome Powell has emphasised the need to monitor economic indicators closely, especially a cooling labour market, stating that decisions will be made on a “meeting-by-meeting” basis.

Current market pricing reflects near certainty of 25-basis-point rate cuts in both October and December, further boosting gold’s appeal as lower rates tend to weaken the dollar and reduce the opportunity cost of holding non-yielding assets like gold.

Also Read: Should You Buy Stocks During Muhurat Trading 2025? 

Geopolitical Tensions Reinforce Safe-Haven Demand

Rising geopolitical strains are also stoking demand. US President Donald Trump recently announced potential trade restrictions targeting China, following tit-for-tat port fee escalations between the two countries. These developments have reignited global risk aversion, making gold a preferred hedge in turbulent times.

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