&imwidth=800&imheight=600&format=webp&quality=medium "Gold prices cross $4000 mark: Will the precious metal continue rising?")
Gold crossed the $4,002.95 an ounce mark for the first time on Wednesday. The rates of the precious metal jumped on the MCX as well, as gold prices breached the 1,22,000 per 10-gram mark. At 9.40 am, MCX Gold December futures were trading at Rs 1,22,149 per 10 grams. MCX Silver December futures were trading at Rs 1,47,450 per kg.
In one of the strongest performances for gold ever, the precious metal rose 50 per cent this year. In September, the prices rose to 12 per cent.
Why has gold rallied this year?
Investors view gold as a safe-haven investment and tend to invest in the precious metal when equity markets are volatile. Due to the unrest caused by the Russia-Ukraine war and the Israel-Gaza conflict, investors have been feeling the need to park their money in gold.
The US government shutdown and expectations of more Federal Reserve interest rate cuts are lending support to gold.
Concerns over the Fed's independence, caused by President Donald Trump's attacks on the US central bank for supposedly not cutting fast enough, are another boost for the metal, reported AFP.
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The World Gold Council (WGC) reported in July that the gold demand grew because of an increasingly unpredictable geopolitical environment and price momentum.
There has also been strong demand for gold via exchange-traded funds on stock markets. "While early gains this year were driven by tariff-induced volatility in the second quarter, recent momentum has been fueled by strong sentiment and record inflows into gold-backed exchange-traded funds," an analyst told AFP.
However, high gold prices have decreased jewelry demand.
Bitcoin also recorded high prices. The cryptocurrency topped $126,000 for the first time. It is because investors around the world are looking for diversification.
Experts believe that the prices of gold will continue to rise further because the US Fed may cut policy rates in October and December.
"Gold's bull run may continue on rate cuts hopes and political and economic uncertainties. Investors should hold their positions. MCX gold prices are expected to move higher to ₹1,25,000 per 10 grams by the end of 2025," Anuj Gupta, a SEBI-registered analyst, told Mint.