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Key Points

Gold is having an incredible month, surging over 11% for its best performance in 14 years. The rally is fueled by worries about a possible US government shutdown and strong expectations for more Federal Reserve rate cuts. In India, the price hit a fresh record of over Rs 1.15 lakh for 10 grams. This continues a trend where gold has now beaten Indian stock market returns for four years in a row.

Key Points: Gold Hits Record High Poised for Best Month in 14 Years

  • Gold price for 24-carat reaches new high of Rs 1,15,450 per 10 grams in India
  • US gold futures rise 0.4% to $3,872 amid potential government shutdown
  • Traders price in 89% likelihood of a 25-basis-point Fed rate cut this month
  • Gold outperforms Indian equities for fourth consecutive Diwali-to-Diwali cycle
  • Silver also outperforms equities driven by industrial demand from solar and EVs
2 min read

Gold reaches record high, poised for best month in 14 years

Gold surges 11.4% in September, its best month since 2011, driven by US shutdown fears and strong Fed rate cut expectations.

"I was open to further rate cuts but the Fed must be cautious - Alberto Musalem, St. Louis Federal Reserve President"

Mumbai, Sep 30

The price of gold reached a record high on Tuesday, on track for its largest monthly surge in 14 years amid concerns over a potential US government shutdown and rising expectations for further Federal Reserve rate cuts.

The price of yellow metal has risen 11.4 per cent so far in September, on track for its best month since August 2011 when it rose 15 per cent boosted by safe haven demand.

The price of 24-carat gold (10 gram) rose to a new high of Rs 1,15,450 on Tuesday, according to data published by the India Bullion and Jewellers Association (IBJA).

US gold futures for December delivery rose 0.4 per cent to $3,872. US President Donald Trump and his Democratic opponents appeared to make little progress at a White House meeting aimed at heading off a government shutdown that could disrupt a wide range of services as early as Wednesday.

The US Labour Department announced it will halt economic data releases, including the September jobs report, in the event of a partial government shutdown closing down its statistics agency.

Recent economic data has bolstered expectations for additional easing by the Federal Reserve.

Traders are pricing in an 89 per cent likelihood of a 25-basis-point cut at the upcoming Federal Reserve meeting, as reported by CME Group’s FedWatch tool.

St. Louis Federal Reserve President Alberto Musalem said he was open to further rate cuts but the Fed must be cautious and keep rates high enough to continue to lean against inflation.

Gold has outperformed Indian equities for the fourth consecutive Diwali-to-Diwali cycle, continuing a trend where the yellow metal has outperformed equities in seven of the last eight years.

Silver also outperformed Indian equities for the third consecutive year, driven by industrial demand from solar panel manufacturing, semiconductors, and electric vehicles.

Meanwhile, analysts say that bullion continues to receive support from robust central bank purchases and sustained inflows into ETFs. The Fed Chair’s cautious remarks on inflation, the labour market and future rate cuts could act as a cap on bullion’s gains.

Investors are awaiting US data on job openings, private payrolls, the ISM manufacturing index, and Friday’s non-farm payrolls report for insights into the economy's trajectory.

- IANS

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Reader Comments

R
Rohit P
₹1,15,450 for 10 grams! My mother's traditional gold investments from 10 years ago have doubled in value. This is why Indian families always prefer gold over stocks - it never lets you down during uncertain times.
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Michael C
As someone working in finance, I appreciate this analysis. The US Fed's decisions impact global markets significantly. Indian investors should diversify - while gold is safe, don't ignore equity opportunities in growing sectors.
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Ananya R
This makes wedding shopping so expensive! 💸 But honestly, with the way things are going globally, gold seems like the only reliable investment. My family has been buying small amounts every month through gold ETFs.
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Sarah B
Interesting to see silver getting attention too due to industrial demand. The solar and EV sectors are booming globally. Maybe time to look beyond just gold for precious metals investment in India.
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Vikram M
While gold is performing well, I'm concerned about how this affects our current account deficit. High gold imports put pressure on rupee. The government should encourage more digital gold investments rather than physical imports.

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