Gold has been experiencing a significant increase in price in recent days. The price of gold on the Multi Commodity Exchange (MCX) has closed higher for the fourth consecutive month. On Friday, the February 2026 gold futures contract on the MCX closed at Rs 1,29,599 per 10 grams, marking an increase of Rs 1,932 or 1.51%. This is just Rs 2,700 lower than the record high of Rs 1,32,294 per 10 grams, which was recorded on October 17, 2025. A further increase of Rs 2,700 would push gold to a new peak.

Factors Driving Gold Prices Up

One of the primary reasons for this surge in gold prices is the growing expectation that the U.S. Federal Reserve may reduce interest rates in the near future. Last week, both Indian and global markets saw significant buying activity in gold as market sentiment grew more positive. There is now an 87% chance that the Federal Reserve will cut interest rates by 25 basis points in its upcoming meeting next month. This expectation has contributed to the rise in gold prices globally.

In addition to this, the decline in the value of the U.S. dollar has also played a role in pushing gold prices up. The ongoing political uncertainty in the United States, largely due to the administration of President Donald Trump, has further increased investor demand for gold as a safe-haven asset. These factors combined have created a favorable environment for gold price growth.

Gold Buying Surge Amid Wedding Season in India

In India, the ongoing wedding season has also contributed to the rise in gold prices. Between the beginning of November and mid-December 2025, an estimated 4.5 to 5 million weddings are expected to take place across the country. Weddings in India often see a surge in demand for gold, as it is a significant part of wedding ceremonies and celebrations. This seasonal demand has further fueled the rise in gold prices.

However, the increase in gold prices has led to a shift in consumer behavior. Due to the higher prices, there has been an increase in demand for lower-carat gold, which is more affordable. Despite the higher costs, the demand for gold remains robust, driven primarily by the wedding season and cultural traditions.

Challenges in Gold Demand and the Impact of Global Market Trends

Despite the ongoing wedding season in India, demand for gold in major Asian markets has been relatively subdued in the past week. The high prices of gold have discouraged retail buyers from making significant purchases. Additionally, in China, the removal of tax exemptions on gold purchases has reduced customer interest, further impacting overall demand.

While there is less enthusiasm for gold in certain markets, the global economic outlook and expectations of a Federal Reserve interest rate cut have kept investors optimistic. Experts believe that if domestic gold prices remain above Rs 1,30,000 per 10 grams (for February 2026 contracts), the price could continue to rise, potentially reaching Rs 1,34,000 per 10 grams or even higher.

Brazil’s First Gold Purchase in Four Years

In a notable development, Brazil has made its first gold purchase in four years. This move is seen as part of a broader trend of nations increasing their gold reserves amid uncertain global economic conditions. Brazil’s purchase highlights the growing trend of countries seeking to bolster their financial security by investing in gold, which is considered a stable and reliable asset in times of economic volatility.

What to Expect in the Coming Weeks for Gold Prices

Looking ahead, the outlook for gold remains bullish, especially with the continued uncertainty in global markets. If the Federal Reserve proceeds with a rate cut as expected, gold prices could experience further upward momentum. Additionally, the ongoing wedding season in India is likely to continue driving demand for gold, although the impact of high prices may limit the volume of retail purchases.

Experts predict that the combination of favorable global economic conditions and seasonal demand in India could keep gold prices on an upward trajectory. If domestic prices break through the Rs 1,30,000 per 10 grams mark, gold could potentially hit new all-time highs, surpassing the record levels seen in October 2025.

the rise in gold prices is being driven by a combination of global economic factors, including expectations of lower interest rates, a weakening U.S. dollar, and political uncertainty in the United States. In addition, the wedding season in India has provided a significant boost to demand, although high prices have led to a shift towards lower-carat gold. With these factors in play, the outlook for gold remains positive, and investors will be closely watching for further developments in the coming weeks.