Gold futures hit record as US shutdown, Fed cut bets spur safe haven demand

Core Insights - Gold prices have reached record highs due to safe-haven buying amid the ongoing US government shutdown and expectations of further Federal Reserve rate cuts [1][6][8] Group 1: Gold Market Dynamics - On October 6, 2025, gold prices surged by ₹1,447 to ₹1,19,560 per 10 grams in domestic futures trade, marking a 1.22% increase [1] - The February 2026 gold contract advanced ₹1,512, or 1.27%, reaching ₹1,20,845 per 10 grams, extending gains for the seventh consecutive session [2] - Last week, gold futures increased by ₹3,222 per 10 grams, reflecting a 2.8% rise [2] Group 2: Physical Demand and Investor Behavior - Physical demand for gold is mixed, with weaker demand in China but steady buying in other Asian markets, as investors anticipate further price increases [3] - SPDR Gold Shares, the largest commodity-backed ETF, saw a notable increase in holdings, indicating strong investor interest [3] Group 3: Silver Market Dynamics - Silver futures also experienced significant gains, with December delivery rising ₹1,956, or 1.34%, to ₹1,47,700 per kilogram [4] - The March 2026 silver contract rallied ₹2,053, or 1.39%, to ₹1,49,321 per kg, following a strong rally last week [4] Group 4: Economic and Policy Influences - The budget impasse in Washington has heightened risk aversion, driving investors towards precious metals [5] - Market participants are anticipating a quarter-point Fed rate cut this month and another in December, closely monitoring upcoming remarks from Fed officials for policy signals [9] Group 5: Supply Conditions - Silver is supported by tightening supply conditions, with the Silver Institute projecting a global market deficit for the fifth consecutive year in 2025 [10]