Shining bright: China-fuelled demand drives gold prices to fresh high

Gold hits fresh global and domestic records on Asia-led demand, weak rupee, and China's bullion push; markets eye Fed rate cuts as prices rally over 15% this month

Gold surged to a fresh record on Tuesday, driven by Asia-led demand and expectations of US rate cuts. In India, yellow metal prices spiked as global gains combined with a weakening rupee pressured by higher H-1B visa fees. China is stepping up efforts to cement its role in the bullion market, with the People’s Bank of China using the Shanghai Gold Exchange to encourage friendly central banks to buy and store reserves within its borders, Bloomberg reported. This is likely among factors driving up gold’s demand. 

Spot gold rose 0.7 per cent to $3,771.94 an ounce as of 10.18 am ET (7.48 pm IST) after touching an all-time high of $3,790.82 earlier. US futures for December delivery gained 0.8 per cent to $3,804.30. In Mumbai’s Zaveri Bazaar, the price of standard 10-gram gold jumped nearly 2 per cent to a record ~1,13,856, extending this month’s rally to more than 15 per cent. Attention has turned to Federal Reserve Chair Jerome Powell’s speech. Markets are pricing in two quarter-point cuts this year — in October and December — with odds of 92 per cent and 77 per cent respectively. 

“Spot gold surged to a fresh all-time high in global markets driven by mounting expectations of more US rate cuts in 2025 and news that China is positioning itself as a custodian of foreign sovereign gold reserves,” said Kaynat Chainwala, AVP, commodity research at Kotak Securities.