Gold prices surged to an all-time high on Tuesday, setting the stage for their strongest monthly rally since 2011. The yellow metal has jumped 11.4% so far in September, fuelled by safe-haven demand amid fears of a potential US government shutdown and growing expectations of further Federal Reserve rate cuts.
According to the India Bullion and Jewellers Association (IBJA), the price of 24-carat gold (10 grams) climbed to a record ₹1,15,450. In global markets, US gold futures for December delivery advanced 0.4% to $3,872.
The political deadlock in Washington heightened market uncertainty as President Donald Trump and Democratic leaders failed to make headway in talks to avert a shutdown that could disrupt federal services as early as Wednesday. The US Labour Department has already warned that a closure would halt key economic data releases, including the September jobs report.
Meanwhile, recent economic indicators have reinforced bets on further monetary easing. The CME FedWatch tool shows traders assigning an 89% probability of a 25-basis-point cut at the Fed’s upcoming meeting. While St. Louis Fed President Alberto Musalem signalled openness to more cuts, he cautioned that rates must remain high enough to curb inflationary pressures.
Gold’s rally has also been supported by strong central bank buying and sustained inflows into exchange-traded funds (ETFs). Notably, the precious metal has outperformed Indian equities for the fourth consecutive Diwali-to-Diwali cycle, a trend seen in seven of the past eight years. Silver, too, extended its winning streak, beating equities for the third straight year on the back of industrial demand from solar, semiconductors, and electric vehicles.
Analysts caution that while Fed Chair’s measured stance on inflation and the labour market may cap bullion’s upside, investors are closely watching upcoming US data releases—including job openings, private payrolls, the ISM manufacturing index, and Friday’s non-farm payrolls—for fresh clues on the economic outlook.