The surge is definitely driven by international winds, but the result is a huge jump for the domestic market.
The Jump: MCX gold opened higher at $₹1,30,550$ and, by mid-session, added ₹1,641 to hit ₹1,31,400 per 10 grams.
The Global Picture: Spot gold outside of India also resumed its rally, gaining almost 1% to 4,241 per ounce. That’s bouncing back sharply, let’s be real.
The Fed Factor: The Big Driver
The thing is, gold is shining because the US Federal Reserve is looking dovish. Why? Lower interest rates make non-yielding assets, like gold, more attractive. That’s just how it works.
Rate Cut Hopes: Markets are betting heavily on a Fed rate cut at their upcoming December 9-10 meeting. The probability for that December cut? Traders are pricing in a whopping 87% probability.
Dovish Signals: Weaker US economic data and “dovish comments” from Fed officials have strengthened those projections. Plus, there’s talk that White House economic adviser Kevin Hassett—who’s seen as dovish—could succeed Jerome Powell as Fed chair. Those too strengthen the mood.
Yields Easing: US Treasury yields, which compete directly with gold, eased slightly after a recent global sell-off in government bonds. That helps gold.
Other Key Observations
Strong Physical Demand: It’s not just institutional trading; physical demand in India remains robust, which always provides a strong floor.
Central Bank Buying: And here’s the kicker: Central banks globally are piling in. The World Gold Council reported that central banks purchased 53\ \text{tons} of gold in October. That’s a 36% month-on-month increase, making it the largest monthly net demand since early 2025. That long-term demand is a massive support for prices.
Data Watch: Investors are now watching a couple of delayed US economic data points, including the November ADP employment figures and the September Personal Consumption Expenditures (PCE) Index, which is due this Friday. Those could move the price violently, so it’s an ongoing situation.
It’s an interesting moment for gold. It’s got a perfect storm brewing: dovish Fed expectations, central bank hoarding, and strong domestic buying. The question is, how much higher can it go?
End….
