Gold Prices Shatter $4,000 Barrier: What's Driving the Historic Rally in Global and Indian Markets

Gold prices hit an unprecedented milestone on Wednesday, surpassing the $4,000 per ounce mark in international markets for the first time in history.

New Delhi: The precious metal reached a record peak of $4,002.53 in spot trading, while December gold futures on the US Commodity Exchange increased 0.5 percent to $4,025 per ounce.

The remarkable surge in gold prices has been primarily driven by increasing demand for safe-haven assets, as investors seek shelter from escalating global economic uncertainties and geopolitical tensions.

Anticipation regarding potential interest rate cuts by the US Federal Reserve has also contributed significantly to this upward momentum.

In India, gold prices likewise climbed to fresh all-time highs on the Multi Commodity Exchange (MCX).

MCX Gold December futures exceeded the Rs 1,22,000 per 10-gram threshold for the first time, achieving a record high of Rs 1,22,101 during early trading sessions.

In early trade, gold futures were trading 0.69 percent higher at Rs 1,21,949 per 10 grams, while silver futures increased by 0.73 percent to Rs 1,46,855 per kg.

The yellow metal has maintained a strong upward trajectory throughout the year, bolstered by substantial central bank purchasing, consistent inflows into gold ETFs, and a weakening US dollar.

Domestic spot gold prices have already increased by over 55 percent this year, reflecting the global bullish sentiment in the precious metals market.

Experts suggest that gold's record-breaking performance may continue if global uncertainties persist and the Federal Reserve proceeds with rate cuts in the upcoming months.

"Gold prices surged past $4,000 per ounce as investors sought safe-haven assets amid mounting global uncertainties," market experts noted.

"The US government shutdown, political instability in France, economic concerns in Japan and Argentina, and intensification of the Russia-Ukraine conflict are all supporting safe-haven buying for precious metals," they further explained.

According to market analysts, gold has support at $3950-3920 while resistance stands at $4020-4045. Silver has support at $47.70-47.40 with resistance at $48.50-48.90.