MUMBAI: Rallying for the fourth consecutive session, gold futures contracts expiring in August, October, and December on the Multi Commodity Exchange (MCX) topped the Rs 1 lakh/10gram mark on Tuesday. In spot markets around the country, the precious metal was trading just under that mark.
The upsurge in the yellow metal’s rate came after its price in international markets crossed the psychologically important $3,500/ounce mark early in the day.
The rally was fuelled by a combination of factors, including growing fears about a showdown between US President Donald Trump and US Federal Reserve chairman Jerome Powell, global trade uncertainties, a weakening dollar, and central banks’ purchase of gold.

“The rally in gold prices continues to be fuelled by the US Federal Reserve’s reluctance to cut interest rates immediately, despite growing pressure from Trump, who has been vocal about rate cuts,” said Jateen Trivedi of LKP Securities.
“This divergence has further enhanced gold’s appeal as a safe haven, pushing prices to fresh lifetime highs in both Comex and MCX.” However, with prices at record levels, intraday volatility is likely to persist, Trivedi cautioned.
According to Satish Dondapati of Kotak Mahindra MF, another reason for the recent rise in gold prices is the weakening US dollar and escalating global trade concerns.
Since globally gold is priced in dollars, a weak greenback means investors in other major currencies could buy the yellow metal cheaper.
Given gold’s haven character, global uncertainties-economic and geopolitical-help prices move north.
So far in 2025, the price of the yellow metal in the international market is up nearly 32%, while in the Indian market, the rise has been slightly lower, at 30%.
This is because of the appreciation of the rupee against the dollar this year.

Gold prices on Tuesday soared above the psychological mark of ₹1 lakh per 10 grams for the first time ever as the U.S. dollar continued to slide amid treasury bond sell-offs and tariff related uncertainties.

The spot price of gold was quoted at ₹1,01,245 for 24 carat per 10 gram, while the gold future was proved at ₹99,000 per 10 grams.

The spike mirrors the rally in gold prices during the first wave of COVID, when it had breached the ₹50,000-mark for the first time in July 2020, as the global economy contracted, on weaker dollar and supply chain disruptions-led trade headwinds, according to analysts.

For India, the second largest gold consumer, mostly by household buyers, followed by China, this eye-popping price level is significant.

This year, gold prices have surged 30% and the rally has sustained for 128 weeks, indicating further rise till some clarity is established.

Renisha Chainani, Head, Research at Augmont said, “Gold has crossed the psychological level of $3,500 an ounce as the dollar fell to a three-year low below 98. President Trump increased pressure on the Federal Reserve, calling for a dramatic rate reduction and even considering replacing Chair Powell.”

“Trump criticised Fed Chair Jerome Powell again on Monday, warning that the U.S. economy will slow unless interest rates are cut promptly,” she said. The comments on Mr. Powell reinforced concerns about the Fed’s independence in establishing monetary policy, as well as the outlook for U.S. assets.

“Furthermore, amidst the trade war, China accused the U.S. of abusing tariffs and warned governments not to seek an agreement with the U.S. that compromised Beijing’s interests. Together, these considerations have led to strong safe-haven demand for gold, which is now up 30% this year,” she added.

Stating that the gold price rally would continue Anitha Rangan, economist, Equirus Securities, said the rally would be driven by reserve accumulation, geo-political uncertainty and comparison of past rallies.

“Gold as a percentage of reserves is the highest now [since 2000], and has seen a meaningful increase since 2021. While we have not had geopolitical conflicts like now in the last three decades, the peaks of 12–13% as of 2021 were also seen in 2000 and 2011. But since 2019, from 12%, it has climbed to more than 18% in 2024. In 2011, reserve build could be a driver, but 2000 onwards, the peak which sustained was not led by reserve build,” she said on the reserve accumulation factor.

On the geo-political uncertainty she said, “Uncertainty always leads to gold as a safe haven. With the U.S. potentially losing its status as the safe haven (dollar decline, US treasury yields climbing higher), and no resolution to the U.S.-China tariff wars, uncertainty could linger for longer.”

Emphasising that the current rally has sustained for 128 weeks, she said past rallies (since 1975), with the exception of 1983 which lasted only 34 weeks, have lasted between 146–241 weeks. “So this rally has more legs to go. This time, it is both reserves plus uncertainty driving the rally. I would conclude that perhaps gold could have more legs in this rally—at least until uncertainty simmers down. Once we see some signs of uncertainty tapering off, we could expect the gold [price] climb to halt,” she stated.

“The short-term outlook on gold will remain strong if trade tension escalates between the U.S. and China. However, long-term outlook remains bullish, supported by strong central bank purchases and geopolitical uncertainties,” said Satish Dondapati, fund manager, Kotak Mahindra Asset Management Company.