Gold prices have been climbing steadily throughout the year. The yellow metal has gained in almost every month since January and is now on track for its strongest annual performance since 1979. On Monday, the MCX gold contract for February 5 delivery surged by more than ₹700. Gold had closed at ₹1,27,667 per 10 grams in the previous session and opened at ₹1,28,352 today. Around 11:42 am, it was trading at ₹1,28,380 per 10 grams, up ₹713.

Gold rises on hopes of Fed rate cuts
Expectations that the US Federal Reserve may cut interest rates in December have provided strong support to gold. A Bloomberg report notes that the government shutdown in the US has delayed the release of economic data, increasing uncertainty. This has boosted demand for gold, considered a safe-haven asset. On Friday, gold touched around $4,170 per ounce in the international market, rising more than 2 percent in just one week. Lower interest rates typically increase investment in non-interest-bearing assets such as gold.

Why gold continues to strengthen
Silver prices also saw a sharp rise on Monday. Silver for March 5 delivery on MCX was trading at ₹1,67,931 per kg at 12:10 pm, up ₹1,944 from the previous closing price of ₹1,65,987. It opened at ₹1,67,190 and traded between a low of ₹1,66,980 and a high of ₹1,68,553 during early hours.

The sustained strength in both gold and silver suggests that investors are increasingly moving toward safe-haven assets amid global economic uncertainty.