Gold futures soar to fresh all-time high of ₹1.21, silver trades near record level; what is behind the incessant rally?

Gold prices on Tuesday, October 7, soared 0.54% to a fresh lifetime high of ₹1,20,900 per 10 grams in domestic futures trade, buoyed by buying in the safe-haven metal amid growing expectations of additional Federal Reserve rate cuts and the prolonged US government shutdown.

On the Multi-Commodity Exchange (MCX), the precious metal futures for December delivery advanced ₹651 or 0.54% to its second consecutive record high of ₹1,20,900 per 10 grams.

Extending gains for the eighth consecutive session, the gold February 2026 futures rose ₹648, or 0.53%, to scale a record ₹1,22,231 per 10 grams.

Last week, the yellow metal futures had surged ₹3,222 per 10 grams or 2.8%.

Globally, Comex gold futures for December delivery breached the key $4,000 per ounce mark for the first time, by rising nearly 1% on Tuesday.

On Monday, gold prices in Delhi grew by ₹9,700 to a fresh peak of ₹1,30,300 per 10 gram, driven by safe-haven buying and a weak rupee, according to data by the All India Sarafa Association.

Meanwhile, silver futures for December delivery were trading closer to their all-time high at ₹1,47,800 per kg, having advanced ₹281 or 0.19%.

The white metal contract from the March 2026 delivery soared ₹327 or 0.22% to trade at ₹1,49,500 per kg. The metal hit its record high on Monday, reaching a peak of ₹1,49,605.

Silver futures witnessed a strong rally last week. It had bounced by ₹3,855 per kg or 2.72%.

However, silver futures for December delivery were quoting marginally lower at $48.43 per ounce.

Analysts said the ongoing US government shutdown has disrupted key federal programmes and delayed the release of crucial economic data, including the September jobs report. The absence of official US macroeconomic indicators, coupled with rising expectations of two Federal Reserve rate cuts this year, has further strengthened demand for the yellow metal.

Furthermore, the latest data from the World Gold Council (WGC) showed that central bank gold buying rebounded in August, with global reserves rising by 15 tonnes during the month.

According to data from the People's Bank of China (PBOC), the country's gold holdings totalled 74.06 million fine troy ounces at the end of September, up from 74.02 million in the previous month, as the central bank expanded bullion purchases for the 11th straight month.