Gold and silver prices surged to fresh record highs in domestic markets, trading above Rs.1,02,000 per 10 gm and Rs.1,17,000 per kg, respectively. The rally is supported by rupee depreciation against the dollar and strong safe-haven demand, amid concerns that political pressure on the US Federal Reserve could accelerate the pace of rate cuts.

  Markets are largely factoring in a 25 basis point rate cut in September, with growing expectations that Fed decisions may be influenced by political dynamics.  Recent US economic data showed slightly faster Q2 growth, but focus now shifts to the US personal consumption report due later today. A stronger reading could stoke fresh inflation concerns.

Market concerns over the Federal Reserve’s independence intensified after President Trump called for the dismissal of Fed Governor Lisa Cook. Rising inflation expectations also underpinned bullion, with the U.S. 10-year breakeven inflation rate climbing to a six-month high of 2.46%.

 Additional support for gold came from escalating geopolitical tensions, including U.S. tariffs and ongoing conflicts in Ukraine and the Middle East. Investor interest remains strong, with gold ETF holdings at a two-year high.

Asian demand stayed firm, with China’s net gold imports via Hong Kong surging 126.8% in July from June, more than doubling month-on-month.

Gold Oct Futures are expected to continue their upside momentum towards $3485 (~Rs 102,500), if it sustains above $3445 (~Rs 101,500). As Silver Sep Futures has broken its range and sustained above $38.80 (~Rs 116,000), upside momentum can swing prices towards a new high of $40 (~Rs 120,000).