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Informist, Wednesday, Oct. 1, 2025

 

By J. Navya Sruthi

 

MUMBAI – The rally seen in gold prices is expected to continue in October and touch fresh record highs on both domestic and international markets. The rally, primarily driven by firm safe-haven demand, will be boosted by uncertainty in the US and rising hopes of another rate cut by the US Federal Reserve this month, according to analysts. However, this time the rally in gold prices is likely to see marginal corrections in prices as the yellow metal is currently "overbought", they said.

 

Fundamentals are unlikely to change, but gold prices are expected to rise to new record highs, said Manoj Kumar Jain, director of Prithvi Finmart. "One added advantage (for gold prices) is China's aggressive buying of the precious metal," he said. According to the World Gold Council, the People's Bank of China continued to buy gold in July, the ninth consecutive month, with total purchases of 36 tonnes during the period. In July, the central bank bought two tonnes of gold.  

 

The continuous buying of gold by central banks and uncertainty in US trade policies are boosting gold prices to new highs almost daily, said Ajay Kedia, director of Kedia Advisory. Further, the world's move towards de-dollarisation and higher inflows into gold exchange-traded funds are also supporting the prices of the yellow metal, Anindya Banerjee, senior vice president for commodity and currency at Kotak Securities, said. 
   

Global gold ETFs recorded net inflows for the third consecutive month in August, adding $5.5 billion, according to the World Gold Council. Inflows in August, along with a rise in gold prices, pushed the total assets under management of global gold ETFs to $407 billion, a 5% increase from the previous month. The collective holdings rose 53 tonnes to 3,692 tonnes in August. 

 

Moreover, the US government is beginning a shutdown of its operations as lawmakers failed to pass the funding bill, which boosted gold prices to a record high on Wednesday. The most-active December gold contract on the Multi Commodity Exchange of India rose to an all-time high of INR 118,444 per 10 grams Wednesday. The contract has risen nearly 53% so far in 2025. On the COMEX, prices rose to a record $3,922.7 per ounce, taking the gains so far in 2025 to nearly 48%.

 

Prices also rose on hopes of a rate cut by the US Federal Reserve in October. According to the CME FedWatch tool, nearly 95% of the traders are pricing in a 25-basis-point rate cut later this month. Lower interest rates increase the appeal of non-interest-yielding precious metals.

 

The December gold futures on the MCX are expected to be in a range of INR 112,850 per 10 grams to INR 122,250 per 10 grams during the month, according to the median of estimates of eight brokerages polled by Informist. On the COMEX, gold prices are in a range of $3,720 per ounce to $4,000 per ounce in October. At 1608 IST, the December gold contract on MCX was up 1% at INR 118,160 per 10 grams, and the same month gold contract on the COMEX was up over 1% at $3,914.5 an ounce.

 

Analysts said gold prices are likely to remain extremely volatile and see a correction from current levels.

"... technical charts show that gold has been severely overbought and profit booking is likely," Kedia of Kedia Advisory said.

 

"Gold prices are expected to remain highly volatile in October, driven by rupee fluctuations, ongoing trade tariff uncertainties, and geopolitical tensions," said Jateen Trivedi, vice president, research analyst - commodity and currency at LKP Securities. "While the broader trend remains positive, intermittent profit booking and healthy corrections of 3–5% are possible before the next leg of the rally." 

 

Following are the details of estimates of brokerages on gold prices for October, in alphabetical order:

Brokerage	MCX  support (INR/10 gm)	MCX resistance (INR/10 gm)	COMEX support ($/oz)	COMEX resistance ($/oz)
Axis Sec	112,000	124,000	3,720	4,000
Kedia	113,200	122,000	3,640	4,000
Kotak	115,000	120,000	3,800	3,960
LKP Securities	114,000	118,500	3,650	3,950
Motilal Oswal Financial Services	114,000	121,000	3,850	3,900
Nirmal Bang	112,500	122,500	3,720	4,080
Prithvi Finmart	112,000	128,000	3,720	4,140
Ventura Securities	110,000	124,000	3,650	4,130
Median	112,850	122,250	3,720	4,000

 

End

 

US$1 = INR 88.69

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

 

With inputs from Ashutosh Pati

Edited by Saji George Titus

 

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