Key Points:
- Gold hits ₹1.05L/10g, silver ₹1.24L/kg.
- Rally driven by US tariffs, Fed cut hopes, festive demand.
- Silver crosses $40/oz, gold nears $3,500/oz globally.
Gold and silver prices soared to historic levels on September 1, 2025, fueled by heightened investor demand, global economic uncertainties, and expectations of a potential interest rate cut by the US Federal Reserve later this month. Rising festive and wedding demand in India added further momentum to the rally.
Gold futures for October delivery on the Multi Commodity Exchange (MCX) surged 2.03%, or ₹2,113, to reach ₹1,05,937 per 10 grams in early trade. December gold contracts also advanced 1.6%, or ₹1,682, to ₹1,06,529 per 10 grams. Silver futures for December climbed 2.13%, or ₹2,597, to an all-time high of ₹1,24,470 per kilogram.
Factors behind the record surge
Market analysts attributed the sharp rise in gold and silver prices to a mix of geopolitical and economic triggers. Escalating trade tensions following fresh US tariffs on Indian goods have prompted investors to seek safety in precious metals.
“Gold marked an all-time high amid tariff escalations, which are continuously supporting buying in bullion,” said Manav Modi, an analyst specializing in precious metals. Traders are also positioning themselves ahead of an anticipated Fed rate cut that could further weaken the US dollar.
In addition, robust physical demand during India’s festive and wedding season and consistent gold purchases by the People’s Bank of China contributed to the rally. The Indian rupee’s record-low exchange rate against the dollar further inflated local bullion prices.
“The rupee’s depreciation against the dollar has amplified domestic gold prices, while silver is also benefiting from continued weakness in the US dollar,” noted Rahul Kalantri, vice president for commodities at Mehta Equities.
Overseas market cues add momentum
The global outlook reinforced the surge, with silver prices crossing $40 an ounce for the first time since 2011. Spot silver climbed as much as 2.1% to $40.54 an ounce, marking a 40% gain for the year. Gold rose 1.1%, trading just shy of its April peak above $3,500 an ounce. Palladium and platinum also posted their strongest levels in a week.
Investors are closely watching the upcoming US jobs report, which is expected to provide further evidence of a cooling labor market. Such data could strengthen the case for a Federal Reserve rate cut at its September meeting.
“Gold and silver prices have suddenly sprung to life as both fundamentals and technicals aligned,” said strategist Charu Chanana of Saxo Capital Markets. She emphasized that the breach of key resistance levels, $3,450 for gold and $40 for silver, sparked momentum-driven buying.
With ongoing global trade disputes, currency fluctuations, and monetary policy uncertainty, analysts suggest bullion’s upward trend could persist in the near term. Investors, however, remain cautious, balancing the allure of safe-haven assets with the potential for sharp corrections if macroeconomic conditions shift.
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