Gold Prices Soar to Record High on US Shutdown, Fed Rate Cut

New Delhi, Oct 1 (PTI) Gold futures on Wednesday jumped Rs 535 to a record Rs 1,17,800 per 10 grams in domestic futures trade, tracking strong global cues as investors sought safe-haven assets after the US government shut down, while weak labour data fuelled expectations of rate cuts by the US Federal Reserve.

On the Multi Commodity Exchange (MCX), gold futures for December delivery jumped Rs 535 or 0.45 per cent to touch a record Rs 1,17,800 per 10 grams.

The February contract extended the rally for fifth straight session by rising Rs 617 or 0.52 per cent to hit a lifetime high of Rs 1,19,055 per 10 grams.

Silver futures also posted strong advances. The December contract surged Rs 2,699 or 1.89 per cent to hit a fresh peak of Rs 1,44,844 per kilogram, while the March 2026 contract bounced Rs 3,980 or 2.77 per cent to touch a record high of Rs 1,47,784 per kg.

Analysts attributed the sharp rise to heightened demand for safe-haven assets after the US Senate failed to pass a spending bill, triggering the first government shutdown since 2018. The closure has raised concerns over delays in key economic data, including the crucial nonfarm payrolls report due later this week.

"Gold hit a record high as investors turned to safe-haven assets on growing risks after the US government shutdown, while weak labour data strengthened expectations of further interest rate cuts by the Federal Reserve," said Manav Modi, Analyst – Precious Metal, Motilal Oswal Financial Services.

On the global front, Comex gold for December delivery rose nearly 1 per cent to breach the USD 3,900 per ounce level for the first time, touching a peak of USD 3,903.45 per ounce. Silver futures for December delivery also rallied to hit a high of USD 47.81 per ounce.

Jigar Trivedi, Senior Research Analyst at Reliance Securities, said traders are closely watching the duration of the shutdown as well as the US Federal Reserve's (Fed) policy path.

"Traders are pricing in a near-certain chance of a rate reduction at the next meeting, with around a 76 per cent probability of an additional cut in December," Trivedi noted.

Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, was trading at 97.62, lower by 0.16 per cent.

A subdued dollar also supported bullion prices. "The dollar index, which tracks the greenback against six major currencies, hovered near a one-week low, making gold cheaper for holders of other currencies," he added.