The US central bank is widely expected to cut borrowing rates, said Manav Modi of Motilal Oswal Financial Services.
Gold futures on the Multi Commodity Exchange (MCX) for October expiry were trading at a new lifetime high of Rs 1,10,548 per 10 grams or Rs 1,1054 per gram, while December gold futures were at a high of Rs 1,11,599/10 grams.
The rise in gold prices bodes well for gold financiers, as it increases the value of the collateral while issuing loans. This reduces the risk of default, as the collateral becomes more valuable relative to the loan amount issued against it.
Accordingly, shares of gold financier IIFL Finance rose 3.5% to trade at Rs 455.10. The stock has surged around 38% in the past six months, and more than 7% in 2025 so far, while Manappuram Finance shares rose around 2% to hit a 52-week high of Rs 296. The stock gained 11% in the past one month, and over 42% in the past six months, taking its year to date rally to a whopping 54%.
Muthoot Finance, which is the market leader in the segment, saw its shares rising more than 2% to hit a 52-week high of Rs 2,996.90. The stock gained nearly 2% in the past five days, and over 7% in the past one month, pushing its rally this year so far to 28%.
Traders are betting that the Fed will continue to cut interest rates next year, which is also supporting gold as non-yielding bullion tends to do well in a low-interest rate environment.
Gold’s stellar rally to successive record highs shows all signs of continuing for the rest of 2025, but a healthy correction is on the cards before breaching $4,000/ounce in 2026, traders and industry experts said on the sidelines of the India gold conference in New Delhi on Tuesday.