Gold Shines Bright: Four-Month Rally Continues
Gold prices in India witnessed a powerful surge last week, marking a fourth consecutive month of gains. This impressive rally was primarily fueled by heightened speculation surrounding an imminent interest rate cut by the US Federal Reserve. The bullish sentiment enabled MCX gold futures for the February 2026 expiry to close at ₹1,29,599 per 10 grams on Friday, registering a solid gain of ₹1,932 or 1.51%. The current price now sits merely ₹2,700 away from its all-time peak of ₹1,32,294 per 10 gm, which was scaled on 17 October 2025.
Key Drivers Behind the Precious Metal's Rally
Market experts point to a confluence of factors creating a perfect storm for gold. The most significant catalyst is the soaring probability of a 25 basis point rate cut in the upcoming US Fed meeting, now estimated at a staggering 87%. Sugandha Sachdeva, Founder of SS WealthStreet, confirmed, "Gold prices extended their winning streak... buoyed by rising expectations of a US Federal Reserve rate cut." She added that recent economic data, showing stable inflation via the Producer Price Index (PPI), has effectively opened the window for this monetary policy easing.
Further bolstering the gold rate today is a pronounced weakness in the US dollar. Sachdeva highlighted that the US Dollar Index has struggled to sustain above the 100 level, making dollar-denominated gold more attractive for holders of other currencies. Political uncertainty stemming from the Donald Trump administration's policies has also added a layer of global risk, enhancing gold's traditional role as a safe-haven asset.
Domestic Demand and Global Dynamics
The domestic picture in India is equally robust. The country recorded an unprecedented 200% surge in gold imports in October 2025, reaching a record $14.72 billion, up from $4.92 billion a year earlier. A massive driver of this local demand is the ongoing wedding season. Experts note that between 4.5 to 5 million weddings are scheduled between early November and mid-December 2025, a period that traditionally sees a massive uptick in gold purchases for jewelry.
On the supply side, Ross Maxwell, Global Strategy Lead at VT Markets, pointed to the India-UAE CEPA talks as a potential game-changer. He stated that an auction-based quota system for gold imports from the UAE could increase organised supply, helping to manage domestic premiums even if international prices remain elevated.
Outlook and Investment Strategy
What lies ahead for the yellow metal? The technical structure suggests more upside potential. Sugandha Sachdeva identified a key hurdle for international gold at $4,250 per ounce. A successful breakout could propel prices toward $4,400 per ounce in the near term. For domestic markets, if the February 2026 contract holds above ₹1,30,000 per 10 gm, the path could be cleared to aim for new highs of ₹1,34,000 per 10 gm and beyond. Key support is placed at the ₹1,25,700 per 10 gm mark.
Investors are advised to remain vigilant of geopolitical developments, particularly the Russia-Ukraine war, as any progress in peace talks could cap extreme upside moves. For those looking to invest, experts suggest that dip-buying continues to be a safe approach, offering the best value in the current volatile environment. Meanwhile, silver is expected to potentially outperform gold if global demand or investor rotation accelerates further.
