Gold’s remarkable rally shows no signs of slowing as the festive season approaches, with many analysts expected the prices to hit Rs 1.3 lakh per 10 grams this festive season. Rising global economic uncertainty, steady central bank purchases and expectations of interest rate cuts are driving the demand.
If the trend continues, gold could climb to Rs 1.5 lakh per 10 grams by early 2026, making it one of the strongest-performing assets in today’s unpredictable market, say analysts.Â
Economic uncertainty and central bank buying
On the Multi Commodity Exchange (MCX), December gold futures hit Rs 1,22,284 per 10 grams this week – their highest level yet. Central banks have been diversifying into gold as a safeguard against weakening currencies and potential rate cuts. Investor sentiment remains strongly in favour of gold as a hedge against inflation and market volatility. The US Federal Reserve’s expected policy shift towards rate reductions has also boosted demand. A softer US dollar has made gold cheaper for non-dollar investors, further driving global demand.
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Ajay Kedia, Managing Director at Ajay Commodities, projected that the market could touch the 1,28,000 mark before witnessing a correction of around 10–12 per cent. He added that this phase of consolidation is likely to be followed by a strong rally in 2026, suggesting a positive long-term outlook despite short-term volatility.
Read More:Â 7 reasons why gold remains Goldman Sachs’s favourite commodity for long term
Geopolitical tensions add momentum
The recent rise has been compounded by heightened tensions between the US and China over trade. Over the weekend, Beijing urged Washington to withdraw threats of new tariffs, warning of possible retaliation. However, US President Donald Trump appeared to soften his stance, signalling readiness to resume talks. Amid these developments, MCX Gold December futures rose 1.62 per cent to Rs 1,23,313 per 10 grams in early Monday trade, while silver gained 3.44 per cent to Rs 1,51,577 per kg. Globally, spot gold hit an all-time high above $4,060 per ounce on Friday, October 10, its eighth consecutive weekly gain and silver neared $51 per ounce.
Festive demand to lift domestic market
With Dhanteras and Diwali around the corner, domestic demand is expected to give further lift to gold prices already buoyed by global trends. Jewellers report rising consumer interest despite high prices, citing gold’s appeal as both an investment and a cultural symbol during the festive period. Unless there is a sharp improvement in global economic sentiment, the yellow metal is set to maintain its upward trajectory.
