Gold Price At Record High: Should You Buy This Festive Season? Experts Weigh In

Gold and silver prices have surged to fresh all-time highs as global markets anticipate a crucial US Federal Reserve meeting this week. Gold, the safe-haven asset, has climbed to $3,694 per ounce internationally and reached a record Rs 1,10,500 on MCX, with eyes on the $3,700 mark.

Silver has also broken a 14-year record, crossing $42.50 per ounce, with spot prices on MCX touching Rs 1,29,878. The rally in precious metals is attributed to a combination of factors.

A softer US dollar and falling Treasury yields have increased the appeal of safe-haven assets like gold and silver, according to Amit Gupta, senior research analyst at Kedia Advisory.

Markets are widely expecting the Fed to implement a 25-basis-point interest rate cut this Wednesday, which would be the first such cut since December. This move is seen as the Fed's response to a cooling labour market and tariff-driven inflation risks. The anticipation of this rate cut has been a primary driver of the rally.

Gold prices hit a new high on Tuesday, crossing the Rs 1,10,000 mark to settle at Rs 1,10,650 per 10 grammes, a significant jump from Rs 1,09,820 on Monday. This sustained momentum underscores the strong investor interest in the yellow metal.

Anuj Gupta, a market and commodities expert, points to the escalation of geopolitical tensions as another major factor. The volatility in global trade and rising geopolitical risks have pushed demand for safe-haven assets higher.

For the near term, Anuj Gupta anticipates that gold and silver will continue to trade with a positive bias, backed by rate-cut expectations and a weaker dollar.

Global financial services firm UBS has adjusted its forecast, raising its gold price target to $3,800 by the end of 2025 and $3,900 by mid-2026. UBS also projects that ETF holdings will return to near-record levels.

Despite the bullish sentiment, caution is advised for new buyers from experts. Amit Gupta from Kedia Advisory, warns that the current risk-reward ratio is unfavourable, as prices have already surged by nearly 50% year-on-year. He suggests that a correction of 5% to 7% is a possibility.

Investors are also closely monitoring the upcoming US economic data, including retail sales and industrial production, as well as the ongoing US-China trade talks in Madrid for further direction.