Gold hits fresh all-time high of ₹86,560 per 10 grams: What's behind the rising prices?

Gold hit an all-time high of ₹86,592 per 10 grams in India while it hit a record high of $2,954.83 per ounce in global markets on Thursday.

According to data available on Multi Commodity Exchange of India (MCX), the price of the precious metal has risen over 11.75 per cent so far this year.

Gold was priced at ₹77,456 per 10 grams on the last day of the previous year.

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Why are prices of gold rising?

One of the major reasons for a rise in gold prices is growing fears that US President Donald Trump could abandon American support for Ukraine in the ongoing Russia-Ukraine war, Bloomberg reported. The US leader on Wednesday said on social media that Volodymyr Zelenskiy had “better move fast” to reach a peace deal “or he is not going to have a country left.”

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President Trump's tariff threats on all countries doing trade with the US has also raised concerns among the global business community. He had earlier promised during Prime Minister Narendra Modi's visit to the country that US will impose reciprocal tariffs on each country which will be equal to those being imposed on American goods in those particular countries.

Investors are parsing the latest US Federal Reserve minutes, which reiterated US policymakers’ cautious stance on interest rates amid stubborn inflation and economic uncertainties. Lower borrowing costs tend to benefit bullion, as it doesn’t pay interest.

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Gold's performance

The precious metal has hit successive records this year, after climbing 27 per cent in 2024, amid mounting concerns over Trump’s consistently disruptive trade and geopolitical agendas. Goldman Sachs this week raised its year-end target to $3,100 an ounce, saying that stronger-than-expected central-bank buying would be a key driver for prices.

Spot gold was up 0.7 per cent to $2,953.18 an ounce as of 10:19 p.m. in London. The Bloomberg Dollar Spot Index was down 0.7 per cent. Silver, palladium and platinum also climbed.