New Delhi: Gold prices surged on Monday, reaching their highest levels in six weeks, as investors sought safety amid growing risk-off sentiment in global markets and a weakening U.S. dollar. The precious metal’s rally reflects heightened demand for safe-haven assets as equity markets face turbulence and uncertainty about upcoming monetary policies.
Spot gold climbed to $4,240.54 per ounce, while U.S. gold futures for December delivery touched around $4,269.40. Silver also experienced a notable surge, briefly hitting a record $57.86 per ounce before easing slightly. The declines in the U.S. dollar made gold and other precious metals more attractive to investors using other currencies, further supporting the rally.
Equity markets showed signs of caution, with S&P 500 futures dropping around 0.8%, reflecting a broader risk-off mood among investors. Cryptocurrencies and other high-risk assets also faced selling pressure. This shift toward safer assets has significantly boosted gold’s appeal as a stable store of value during uncertain times.
Analysts note that expectations of a U.S. interest rate cut later this month have added momentum to gold prices. Recent dovish comments from Federal Reserve officials, coupled with softer-than-expected economic data, have strengthened the belief that borrowing costs may decrease. According to the CME FedWatch tool, there is roughly an 87% probability of a rate cut in December. Lower interest rates reduce the opportunity cost of holding non-yielding assets like gold, further enhancing its attractiveness.
The rise in gold highlights the growing role of precious metals as a hedge against market volatility. Other metals, including platinum and palladium, also recorded modest gains. For investors, these developments underscore the importance of diversifying portfolios toward assets that offer stability and protection against economic uncertainty.
Market participants will closely monitor upcoming U.S. economic reports, including inflation data, employment figures, and consumer spending trends. These indicators are expected to influence the Federal Reserve’s next steps on interest rates, which in turn could impact gold prices. If rate cuts materialize and the dollar remains soft, gold may sustain its upward momentum; however, any recovery in risk sentiment or stronger-than-expected economic performance could temper the rally.
The bullion market’s performance signals continued investor caution and a renewed emphasis on safe-haven assets as global markets navigate volatility and economic uncertainty.