Gold prices on the Multi Commodity Exchange (MCX) surged past the ₹1 lakh-mark on Friday, driven by robust safe-haven demand following a sharp escalation in geopolitical tensions between Israel and Iran. Renewed conflict in the Middle East, expectations of interest rate cuts, and a risk-off sentiment across financial markets collectively contributed to the rally in the yellow metal.
MCX gold rate settled 0.04% higher at ₹1,00,314 per 10 grams after touching an intraday high of ₹1,00,681. Meanwhile, MCX silver prices declined marginally by 0.02% to ₹1,06,474 per kg, after hitting a high of ₹1,06,940 during the session.
In the international market, spot gold price surged 1.3% to $3,428.10 an ounce, inching closer to its all-time high of $3,500.05 set in April. For the week, prices gained approximately 4%. US gold futures also advanced 1.5% to settle at $3,452.80.
Drivers Behind Gold Price Rally
“The latest upswing has been fueled by renewed conflict in the Middle East, particularly the Israeli strikes on Iranian nuclear infrastructure, which have significantly increased global risk aversion, reinforcing gold’s appeal as a safe-haven asset,” said Sugandha Sachdeva, Founder of SS WealthStreet.
She further noted that the US Dollar Index, which peaked at 110.18 in January, has since dropped to a three-year low, weighed down by disappointing economic indicators and policy uncertainty amid renewed tariff measures.
“The sharp decline in the dollar index has been a key catalyst driving gold higher. Additionally, easing inflation—with the US CPI cooling to 2.4% in May, below expectations—has raised prospects of a rate cut by the Federal Reserve, potentially as early as its June 18 meeting,” Sachdeva added.
Markets are now increasingly pricing in a cumulative 50 basis points rate cut in 2025, lending further support to bullion prices.
Gold Price Performance in 2025
Gold has delivered stellar returns so far this year, rising 31% year-to-date (YTD) and consistently posting record highs. The metal has reaffirmed its position as one of 2025’s top-performing asset classes and a reliable hedge against macroeconomic and geopolitical uncertainty.
From ₹7,638 in 2005 to over ₹1,00,000 in June 2025, MCX gold prices have soared by an impressive 1,200.84%. In comparison, silver has gained 668.84% over the same period.
Notably, gold prices have rallied by ₹10,000 in just the past 74 days. The asset has delivered positive returns in 16 of the last 20 years, highlighting its resilience and investor appeal.
“This sustained rally is being driven by a confluence of global macroeconomic and geopolitical factors. These include heightened economic uncertainty, anticipated rate cuts by the US Fed, aggressive central bank gold purchases, and rising geopolitical tensions,” Sachdeva observed.
Gold Price Outlook
With supportive macroeconomic drivers and strong momentum, the outlook for gold remains bullish in the near term. According to Sachdeva, if tensions in the Middle East escalate further, another wave of safe-haven buying could propel gold prices toward the $3,500 mark.
“A breakout above that level could drive prices even higher toward the $3,590 per ounce where prices are likely to witness some resistance. In the domestic market, MCX gold is potentially heading towards ₹1,05,000 per 10 grams, with near-term support seen at ₹96,200 level,” Sachdeva said.
NS Ramaswamy, Head -Commodity Desk and CRM at Ventura Securities, expects COMEX gold price to create a fresh high of $3,540 in the short term, with resistance at $3,476, and support seen at $3,400 – $3,345 levels.
“MCX gold August futures presently has support at ₹98,900, and is poised to surge to ₹1,02,000 in the short term,” said Ramaswamy.
Goldman Sachs reiterated its forecast that structurally strong central bank buying will raise the gold price to $3,700 per ounce by end-2025 and $4,000 by mid-2026. BofA sees a path for gold to rally to $4,000 per ounce over the next 12 months.
Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before making any investment decisions.
