Gold Hits Record High, Poised for Strongest Monthly Surge in 14 Years
Gold prices soared to an all-time high on Tuesday, heading toward their largest monthly gain in 14 years. Investor concerns over a potential US government shutdown, coupled with rising expectations of further Federal Reserve rate cuts, have fueled the rally.
In September alone, gold has surged by 11.4%, marking its best month since August 2011, when prices jumped 15% amid a wave of safe-haven demand. In India, the price of 24-carat gold (10 grams) touched a new peak of Rs 1,15,450, according to the India Bullion and Jewellers Association (IBJA).
US gold futures for December delivery climbed 0.4% to $3,872, reflecting global investor caution. Talks at the White House between US President Donald Trump and Democratic leaders offered little progress in preventing a government shutdown that could halt services as soon as Wednesday. In the event of a partial shutdown, the US Labor Department has announced it will pause key economic data releases, including the September jobs report.
Economic indicators and market sentiment are further fueling expectations of additional easing by the Federal Reserve. Traders are now pricing in an 89% probability of a 25-basis-point rate cut at the upcoming Fed meeting, according to CME Group’s FedWatch tool. While Fed officials, including St. Louis Fed President Alberto Musalem, signal openness to rate cuts, caution remains as the central bank balances the need to fight inflation.
Gold has consistently outperformed Indian equities in recent years, marking its fourth consecutive Diwali-to-Diwali cycle of gains over equities. Silver has also seen strong performance, driven by industrial demand from solar panels, semiconductors, and electric vehicles. Analysts highlight continued support from central bank purchases and sustained ETF inflows, even as cautious Fed commentary may temper further bullion gains.
Investors are now closely watching upcoming US economic data—including job openings, private payrolls, the ISM manufacturing index, and Friday’s non-farm payroll report—for insights into the direction of the global economy.
Gold’s rally is more than just numbers—it’s a reflection of investor caution, global uncertainty, and the enduring allure of safe-haven assets. For everyday investors, this is a reminder that diversifying into gold can provide both protection and potential growth during turbulent times.