Gold prices in the national capital surged for the second consecutive day, reaching a new peak of Rs 1,40,850 per 10 grams on Tuesday. This represents a significant increase of Rs 2,650, according to the All India Sarafa Association. The previous day saw the precious metal close at Rs 1,38,200 per 10 grams.

This year alone, gold prices in the domestic market have jumped by Rs 61,900, which is a 78.40 percent increase from the Rs 78,950 per 10 grams recorded on December 31, 2024.

Silver also experienced a rally, rising Rs 2,750 to a record Rs 2,17,250 per kilogram, inclusive of all taxes. The previous session saw silver settle at Rs 2,14,500 per kg, after a sharp rise of Rs 10,400 per kg. So far this year, silver prices have increased by Rs 1,27,550, or 142.2 percent, from the Rs 89,700 per kilogram recorded on December 31, 2024.

Globally, spot gold prices have also surged, nearing the USD 4,500 mark. On Tuesday, spot gold increased by USD 54.3, or 1.22 percent, to hit a record of USD 4,498 per ounce in international markets. During the current calendar year, spot gold prices have surged by USD 1,892.23, or 72.62 percent, from USD 2,605.77 per ounce, recorded on December 31, 2024. Spot silver also rose, increasing 1.4 percent to breach the USD 70 per ounce mark.

Saumil Gandhi, Senior Analyst - Commodities at HDFC Securities, attributed the rally to expectations that the Federal Reserve will deliver more than one rate cut in 2026, as well as rising geopolitical tensions that are strengthening the safe-haven appeal of gold and silver. Praveen Singh, Research Analyst at Mirae Asset ShareKhan, noted that gold has extended its sharp rally to almost USD 4,500 per ounce due to geopolitical jitters and a weaker dollar, as markets anticipate the Federal Reserve to cut rates more than two times next year.

The surge in gold prices reflects a broader trend of investors seeking safe-haven assets amid global economic uncertainty and geopolitical instability. Expectations of interest rate cuts by the Federal Reserve are also contributing to the rally, as lower interest rates reduce the opportunity cost of holding non-interest-bearing assets like gold.