Gold prices hit all-time high of ₹1.10 lakh per 10 gram: Check key reasons behind the surge

Gold prices are on the rise and making new record highs. On Monday, domestic gold rate surpassed ₹1.1 lakh per 10 gram across major cities. In New Delhi markets, the 24K gold rate stood at ₹110,310 per 10 gram and 22K gold at ₹101,118 per 10 gram.

Gold Price today in major cities:

As of 1:00 pm, the MCX Gold October future stood at ₹110,420 per 10 gram, with a day high of ₹110,440 and a day low of ₹110,070. In the US markets, Gold futures are trading 0.2% at $3,726 an ounce.

Gold prices have delivered better returns to investors compared to the benchmark indices in 2025. So far this year, yellow metal prices have risen by over 40%, while NIFTY50 and SENSEX rose 6.4% and 5.06% during the same period.

US Fed expected to cut interest rates

The US Federal Reserve will announce its policy decision on September 17. Markets are expecting 25 basis point reduction amid improving US economic data.

Ease in the US monetary policy is likely to be positive for gold prices as interest rate cuts lead to a rise in gold prices and demand. Wondering how?.

US interest rate cuts mean lower returns on interest-paying assets like bonds and savings. Hence, investors start looking for better alternatives with higher returns. Gold, which doesn’t pay any interest, becomes more attractive in such a situation.

Besides this, an interest rate cut usually leads to a fall in domestic currency, as easier monetary policy means more money pumped into the economy, leading to reduced value for the US dollar. Since gold is priced in dollars globally, a weaker dollar makes gold cheaper for buyers in other countries, increasing demand.

Fall in the US dollar index

The US dollar index, which measures the value of the US dollar compared to a basket of six major foreign currencies, has declined for the second straight day and is trading around 96.4, which is the lowest level since July, 2025.

Experts believe markets have largely priced in a 25 basis points rate cut by the Federal Reserve. As a result, the US dollar index is declining, which is indirectly positive for the dollar-denominated Gold prices.

Global economic uncertainty

Investors are also flocking to gold, considering it as a safe-haven asset amid current market volatility or geopolitical tensions. The United States, imposing trade tariffs on various countries to protect its domestic economy, has led to uncertainty and concerns regarding inflation, global economic slowdown and recession.

Besides this, geopolitical crises in the Middle East and Russia have also led to jitters among investors. As a result, gold acts as a hedge in this situation.