Gold prices in India surged sharply on Wednesday, with MCX gold futures rising nearly 6% to trade around Rs 1,75,399 per 10 grams, tracking a powerful rally in international markets where bullion has moved decisively toward the $5,600-per-ounce level.
The sharp move in domestic prices came as spot gold climbed to fresh record highs globally, driven by sustained safe-haven demand amid rising geopolitical tensions, policy uncertainty, and concerns over global financial stability. Internationally, gold has been extending gains after breaching the psychological $5,000 mark earlier this week, with momentum accelerating as prices approached $5,600 per ounce.
Market participants attributed the rally to a combination of geopolitical stress, including renewed tensions in Eastern Europe and the Middle East, alongside growing unease over global trade fragmentation and fiscal risks in major economies. Persistent uncertainty has prompted investors to increase allocations to gold as a non-sovereign store of value.
Another key driver has been expectations of easier monetary conditions. While the US Federal Reserve has kept rates unchanged for now, markets continue to price in potential rate cuts later this year, which has weighed on the dollar and supported gold prices. Lower real yields tend to enhance the appeal of non-interest-bearing assets such as bullion.
Strong central bank buying has also provided structural support. Official sector demand has remained elevated, reinforcing gold’s role as a reserve asset amid shifting global financial dynamics. In addition, investment flows into gold-backed products and increased physical demand in parts of Asia have added to the upside momentum.
The sharp rise in global prices translated into an amplified move on MCX due to currency factors and domestic demand, pushing Indian gold prices to fresh highs. However, analysts cautioned that the pace of the rally has been extremely steep, raising the possibility of short-term volatility even as the broader trend remains supported by global fundamentals.
With gold continuing to trade near record levels internationally, domestic prices are expected to remain closely tied to movements in global markets, the dollar, and evolving geopolitical developments.
