Mumbai: Gold prices jumped sharply again on Tuesday, extending a strong rally after recording their biggest single day gain since 2008 a day earlier.
Spot gold rose more than 2 percent, building on Monday’s nearly 6 percent jump. Prices moved above the 5,000 dollar per ounce level and remained close to record highs reached earlier in the week.
The rally was driven mainly by rising global tensions and renewed interest in gold as a safe investment. Investors rushed to buy the metal after reports of a U.S. military incident involving an Iranian drone near an American aircraft carrier. Such developments increased fears of wider conflict in the Middle East and pushed traders toward safer assets like gold.
At the same time, expectations that the U.S. Federal Reserve may cut interest rates later this year also supported gold prices. Lower interest rates usually weaken the dollar and make gold more attractive because it does not pay interest.
Analysts said the market has been extremely volatile, with sharp rises followed by sudden pullbacks. Earlier in the week, gold had fallen heavily before rebounding strongly as buyers returned to the market.
Major banks remain optimistic about gold’s outlook for 2026. Some have raised their price forecasts and now expect gold to move toward 5,600 dollars in the coming months, with longer term targets going even higher if global risks remain elevated.
Other precious metals also moved higher, including silver and platinum, as investors sought protection from uncertainty in financial markets.
Market experts cautioned that price swings could continue in the short term because traders are reacting quickly to geopolitical news and economic data. However, they said strong demand from investors and central banks is likely to keep gold supported in the longer run.
For consumers, the surge means higher jewellery prices, while for investors it highlights gold’s role as a shelter during periods of global tension and economic doubt.