MCX gold, silver hit new peaks as US shutdown persists, rate cut hopes rise
This story was originally published at 11:07 IST on 6 October 2025
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--COMEX December gold contract hits new record high of $3,951.4 per ounce
--MCX December gold contract hits new record high of INR 119,426 per 10 gm
--MCX December silver contract hits new record high of INR 147,125 per kg
MUMBAI – Futures contracts of gold and silver on the Multi Commodity Exchange of India rose to fresh all-time peaks, tracking prices on the COMEX as the US government's shutdown continued, supporting safe-haven demand for precious metals. Prices were also supported by growing expectations of further rate cuts by the Federal Reserve, and weakness in the yen.
The US Senate on Friday failed to advance competing plans to extend federal funding, effectively guaranteeing that the government shutdown will stretch into this week. The administration will start mass layoffs of federal workers if US President Donald Trump decides negotiations with congressional Democrats to end a partial government shutdown are "absolutely going nowhere," Reuters reported on Sunday, quoting a senior White House official.
There are "mounting concerns over the implications of the ongoing shutdown, which is said to be structurally different from past episodes," Dow Jones quoted XS.com's Samer Hasn as saying in an email. "These developments are amplifying hedging demand for gold as markets weigh the risk of shocks across multiple fronts," he added.
The shutdown has delayed key economic releases, including September's non-farm payrolls report, leaving investors to rely on alternative indicators that signal a weakening labour market. This has further increased expectations of a rate cut by the US Federal Reserve at its October meeting. According to the CME FedWatch tool, 95.7% of the traders are pricing in a 25-basis-point rate cut, and 4.3% anticipate the rate to remain unchanged at 4.00-4.25%. Lower interest rates increase the appeal of non-interest-yielding precious metals.
The yen tumbled against the US dollar by the most in five months after fiscal dove Sanae Takaichi was elected to lead the ruling party and become the next prime minister, Reuters reported. "Yen weakness on the back of the Japanese LDP (Liberal Democratic Party) elections has left investors with one less safe-haven asset to go to, and gold was able to capitalise," the report quoted KCM Trade Chief Market Analyst Tim Waterer as saying.
At 0939 IST, the most active December gold contract on the MCX hit another high at INR 119,560 per 10 grams, after touching an all-time high of INR 119,426 per 10 grams earlier in the day. The most active December silver contract also hit another high of INR 147,700 per kilogram, after touching an all-time high of 147,125 per kg.
At 0942 IST, the most active December gold contract on COMEX also hit a high of $3,956.8 per ounce, after touching a record high of $3,951.4 per ounce earlier in the day.
The rally in gold shows no signs of slowing as global retail investment demand intensifies, Dow Jones cited Heng Koon How at UOB Global Economics & Markets Research as saying. All of the metal's key long-term positive drivers, especially further dollar weakness and strong allocation from central banks, remain firmly in place, the report said. "That, plus the surge in retail interest, prompts UOB to lift its price forecasts further beyond $4,000/oz across 2026," the report cited How as saying. End
US$1 = INR 88.74
IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT
Reported by Shreya Shetty
Edited by Avishek Dutta
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