Gold prices surged to fresh lifetime highs on September 23, 2025, driven by a confluence of strong festive demand in India, growing expectations of further interest rate cuts by the US Federal Reserve, and a weakening dollar. The rally has reignited investor interest in bullion as both a safe-haven asset and a hedge against inflation, with silver also joining the uptrend.
In domestic markets, 24-carat gold climbed to approximately Rs 114,300 per 10 grams, while 22-carat gold hovered near Rs 104,800. Globally, spot gold breached the US$ 3,700 per ounce mark during Asian trading hours, extending its record-setting momentum. The rally is being closely watched by traders, central banks, and retail buyers alike, as macroeconomic signals continue to favor precious metals.
Key Highlights From The Bullion Surge
- Gold prices hit record highs in India and global markets
- Domestic 24-carat gold trades near Rs 114,300 per 10 grams
- Spot gold rises above US$ 3,700 per ounce globally
- Silver prices rally past Rs 1,40,000 per kg in select markets
- Festive demand, Fed rate cut expectations, and dollar weakness drive momentum
Festive Demand Lifts Physical Buying
India’s festive season has historically been a strong driver of gold demand, and this year is no exception. The onset of Navratri has led to a spike in jewellery purchases, with buyers advancing purchases ahead of Diwali and the wedding season. Despite elevated price levels, footfalls at jewellery stores remain robust, particularly in Tier I and Tier II cities.
Retailers report:
- Increased advance bookings for wedding jewellery
- Strong demand for lightweight and investment-grade gold items
- Resilient rural buying supported by stable monsoon and agri incomes
However, analysts caution that sustained high prices may eventually dampen bulk buying among price-sensitive households.
Fed Rate Cut Expectations Fuel Investment Demand
Global investors are increasingly convinced that the US Federal Reserve will continue its dovish monetary stance. Following a 25 basis point rate cut earlier this month, markets are pricing in two additional cuts—one each in October and December. Lower interest rates reduce the opportunity cost of holding non-yielding assets like gold, making it more attractive as a store of value.
Key factors supporting this view include:
- Weak US labor market data and soft inflation readings
- Fed Chair Jerome Powell’s upcoming remarks expected to reinforce easing bias
- CME FedWatch tool shows over 90 percent probability of further cuts
This has led to a surge in gold ETF inflows and speculative long positions in futures markets, particularly in the US and Europe.
Dollar Weakness And Safe-Haven Appeal
The US dollar index has softened in recent sessions, making gold more affordable for buyers holding other currencies. This has added momentum to bullion’s rally, especially in emerging markets and Asia.
Additionally, geopolitical tensions in the Middle East and Eastern Europe, coupled with volatile equity markets, are pushing investors toward gold as a safe-haven asset. Central banks continue to be net buyers of gold, reinforcing its role as a strategic reserve.
Silver Joins The Rally
Silver prices have also rallied sharply, supported by industrial demand and festive buying. With increased usage in solar panels, electronics, and electric vehicles, silver is benefiting from both investment and consumption trends.
In India, silver traded above Rs 1,40,000 per kg in some markets, with traders reporting strong wholesale orders from manufacturers and exporters.
Looking Ahead
The outlook for gold remains bullish in the near term, with festive demand expected to peak in October and global monetary policy leaning toward further easing. However, traders will closely monitor US economic data, Fed commentary, and geopolitical developments for signs of volatility.
For retail buyers, the current rally presents both an opportunity and a challenge—while gold continues to be a trusted store of value, elevated prices may require strategic planning and staggered purchases.
Sources: New Indian Express, CNBC, Times of India.
