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Informist, Tuesday, Oct. 7, 2025

 

By Reshma Ravi

 

MUMBAI – Futures contracts of gold on the Multi Commodity Exchange of India and the COMEX hit a record high on Tuesday due to increasing safe-haven demand following the US government shutdown and political uncertainties. Prices were also supported by growing expectations of a rate cut by the US Federal Reserve in October.

 

At 1611 IST, the most-active December contract of GOLD on the MCX was 0.2% higher at INR 120,469 per 10 grams after touching a record high of INR 120,900 per 10 grams. The most-active December gold contract on COMEX was up 0.1% at $3,980.4 per ounce, after hitting a record high of $4,000.1 per ounce earlier in the day. The gains in gold prices were capped as traders booked profits at higher levels, analysts said.

 

"The political shakeups in France and Japan are adding to fiscal concerns and contributing to the rally in gold," Bloomberg quoted Nicky Shiels, head of research and metals strategy at MKS PAMP SA, as saying in a note. The newly appointed French Prime Minister Sebastien Lecornu resigned on Monday after struggling to pass the budget through the fractured French Parliament amid a debt crisis. Lecornu named his ministers on Sunday evening, but quit some hours later, making his government one of the shortest-lived in French history. In Japan, Sanae Takaichi, considered a fiscal dove, was elected to lead the ruling party and become the next prime minister.

 

The US government shutdown has delayed most US economic data, including September's non-farm payrolls report, casting uncertainty on the economic outlook. This has further increased expectations of a rate cut by the Fed at its October meeting, Kedia Advisory said. According to the CME FedWatch tool, around 93% of traders are pricing in a 25-basis-point rate cut in October, while around 7% expect the rate to remain unchanged at 4.00-4.25%. Lower interest rates increase the appeal of the non-interest-yielding precious metals.

 

Moreover, Goldman Sachs raised its gold price forecast for December 2026 to $4,900 per ounce from $4,300 on Monday, citing strong Western exchange-traded fund inflows and likely central bank buying.

 

SILVER contracts were steady on MCX, while they fell on COMEX. At 1625 IST, the most-active December contract on the domestic exchange was steady at INR 147,550 per kg. The same-month contract on COMEX was at $48.30 per ounce, down 0.3%.

 

Outlook for the rest of the session:

--MCX Dec gold seen at INR 119,350–INR 121,400 per 10 grams

--COMEX Dec gold seen at $3,935.2-$4,038.7 an ounce

--MCX Dec silver seen at INR 143,600-INR 148,800 per kg

--COMEX Dec silver seen at $46.80-$49.10 an ounce

End

 

US$1 = INR 88.77

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

 

Edited by Saji George Titus

 

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