Gold is on track to post its strongest weekly performance since April, driven by growing investor unease over the U.S. fiscal outlook and a weakening U.S. dollar. The rally comes amid renewed concerns about rising national debt and subdued demand at recent Treasury bond auctions, which have prompted a shift toward safe-haven assets.
The surge in gold prices followed the U.S. House of Representatives’ passage of a sweeping tax and spending bill, further stoking fears of an unsustainable debt trajectory. Investors have responded by turning to gold as a hedge against fiscal instability and potential market volatility.
Dollar Weakness Spurs Bullion Demand
Adding to gold’s momentum, the U.S. dollar has slumped more than 1% this week—its steepest weekly decline since early April. The dollar’s slide has made gold, which is priced in dollars, more attractive to international buyers by lowering its relative cost.
Indian Gold Prices Soar on MCX
In India, the rally has been particularly pronounced. Gold futures on the Multi Commodity Exchange (MCX) surged over ₹800, reaching ₹96,400 per 10 grams. Spot prices for 24-karat gold touched ₹97,530, buoyed by both global cues and domestic currency fluctuations.
“Gold’s upside was supported by a softer dollar and rising uncertainty in global markets,” said Jateen Trivedi, Vice President and Research Analyst at LKP Securities.
Geopolitical Tensions Add to Safe-Haven Demand
Escalating tensions in the Middle East have also bolstered gold’s safe-haven appeal. Iran has issued a warning to the United States, cautioning of repercussions if Israel targets its nuclear facilities—a development that has added to geopolitical risk premiums.
Analysts Brace for Market Volatility
Looking ahead, analysts anticipate continued volatility, with upcoming U.S. economic data—including Purchasing Managers’ Index (PMI) figures and housing market reports—likely to influence short-term movements in the gold market.
Rahul Kalantri, Vice President of Mehta Equities, noted that while Bitcoin has drawn some investor attention recently, gold remains firmly supported by broader risk aversion in equity markets and ongoing global uncertainty.
In India, key support for gold is seen near ₹94,880 per 10 grams, with resistance at ₹96,240. On the international front, prices are expected to trade between $3,260 and $3,345 per ounce in the near term.
Related topics:
- India Surpasses China in Gold Purchases, Buying 51% More in Three Months
- Qilu Bank Enhances Support for Small Businesses with Innovative Financial Tools
- Bitcoin Poised for a Surge Amid Gold’s Delivery Delays, Expert Claims
