MUMBAI– Gold prices surged to an all-time high on Tuesday, putting the yellow metal on track for its strongest monthly performance since 2011, as fears of a potential U.S. government shutdown and expectations of further Federal Reserve rate cuts fueled safe-haven demand.
Gold has jumped 11.4 percent so far in September, its best monthly gain since August 2011, when prices rose 15 percent. According to the India Bullion and Jewellers Association (IBJA), the price of 24-carat gold reached a new peak of Rs 1,15,450 per 10 grams.
In the U.S., December gold futures climbed 0.4 percent to $3,872. The rise comes as political gridlock in Washington raises the risk of a government shutdown that could disrupt federal services as early as Wednesday. The U.S. Labor Department has already said it would suspend economic data releases, including the September jobs report, in case of a shutdown.
Markets are also betting heavily on monetary easing. Traders see an 89 percent chance of a 25-basis-point rate cut at the Fed’s upcoming meeting, according to CME Group’s FedWatch tool. St. Louis Fed President Alberto Musalem said he remains open to further cuts but stressed caution, warning that rates must stay high enough to keep inflation in check.
Gold’s performance has far outpaced Indian equities, marking the fourth straight Diwali-to-Diwali cycle of outperformance and the seventh in the last eight years. Silver, too, has beaten equities for three consecutive years, driven by strong industrial demand from solar panels, semiconductors, and electric vehicles.
Analysts note that robust central bank purchases and continued inflows into gold ETFs have provided additional support for bullion. However, some caution that Fed Chair Jerome Powell’s remarks on inflation, the labor market, and rate policy could temper further gains.
Investors are now awaiting upcoming U.S. data — including job openings, private payrolls, the ISM manufacturing index, and Friday’s non-farm payrolls report — for signals on the economy’s trajectory. (Source: IANS)
