 "Gold hits record high of $4,400 per ounce. What’s pushing the price of yellow metal up?")
Gold is jumping to record highs.
The precious metal for the first time cleared the $4,400 (Rs. 3.94 lakh) per ounce barrier.
Spot gold increased 1.4 per cent to a record high of $4,403.60 (Rs. 3.94 lakh) an ounce, clearing its October peak. Meanwhile, gold futures for February 2026 rallied over 1 per cent to a peak of $4,442.55 (Rs. 3.98 lakh).
Gold is up nearly 70 per cent this past year, having crossed the $3,000 (Rs. 2.69 lakh) and $4,000 (Rs. 3.58 lakh) marks for the first time. The precious metal is set to make its largest gains since 1979. It is up nearly 70 per cent this year from around $2,670 (Rs. 2.39 lakh) at the beginning of January.
But what is behind the upward move? Is it the right time to invest?
Let’s take a closer look.
What’s behind the move
Traditionally viewed as a safe-haven asset, gold has been supported by heightened geopolitical and trade tensions, steady central bank buying, and expectations of lower interest rates next year.
Tensions between the United States and Venezuela are seemingly contributing to the rise in gold prices. The news that the US was in pursuit of a third oil tanker linked to Venezuela is contributing to the surge.
There are also renewed tensions in West Asia after Israel warned the US that Iran’s Islamic Revolutionary Guard Corps may be using an ongoing military exercise focusing on missiles as cover to launch an attack on it.
“The chances for an Iranian attack are less than 50 per cent, but nobody is willing to take the risk and just say it is only an exercise,” an Israeli source told Axios.
The development comes a day after NBC News reported that Prime Minister Benjamin Netanyahu will present plans for a new potential attack on Iran to US President Donald Trump during his upcoming visit to the United States.
“The threat of the missiles is very real, and we weren’t able to prevent them all last time,” a source said.
The two countries earlier this year were at war for nearly 12 days. Iran said over 1,000 people were killed by strikes from Israel. Tehran responded by launching over 500 ballistic missiles and around 1,100 drones at Israel, in which 32 people were killed and over 3,000 were injured.
Prathamesh Mallya of Angel One told The Times of India, “Weak dollar, dovish Federal Reserve, and lower inflation data in the US triggered the momentum in gold prices in the recent week.”
Experts also point to the weakness of the dollar and rate cuts from the Federal Reserve.Markets are currently pricing in two US rate cuts for next year despite the Federal Reserve signalling caution. The Fed last week issued a quarter-point rate cut. Non-yielding assets such as gold tend to do well in lower interest rate environments.
StoneX senior analyst Matt Simpson said two Fed rate cuts were pencilled in for 2026, with a faster US jobs slowdown and a shift to a more dovish Fed likely to add further upside to gold.
A softer dollar has also provided an additional tailwind by making the metal cheaper for overseas buyers.
Is it the right time to invest in gold?
Analysts have issued a word of caution.“With December usually producing positive returns for gold and silver, seasonality is on their side,” said Simpson.
“Given that gold has already risen 4 per cent this month and we’re nearing the end of the year, bulls may want to tread with caution as volumes are set to deplete and the odds of profit-taking are also likely on the rise.”
Advocates of investing in gold call it a “safe haven” — arguing the commodity can serve to diversify and balance your investment portfolio, as well as mitigate possible risks down the road as a hedge against rising inflation. Some also take comfort in buying something tangible that has the potential to increase in value over time.
Still, experts caution against putting all your eggs in one basket. And not everyone agrees gold is a good investment. Critics say gold isn’t always the inflation hedge many claim — and that there are more efficient ways to protect against potential loss of capital, such as derivative-based investments.
Elsewhere, platinum jumped 4.3 per cent to $2,057.15 (Rs. 1.84 lakh), hitting its highest level in more than 17 years, while palladium climbed 4.2 per cent to $1,786.45 (Rs. 1.60 lakh), hitting a near three-year high.
With inputs from agencies
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