Gold Nears $4,100 As Fed Signals Inflation Risks, Silver Hits $51 Amid Record Rally & Tight Supply

Mumbai: Gold prices continued to rise this week as investors reacted to signals from the US Federal Reserve that inflation could remain high for longer. Pankaj Singh, Founder & Principal Researcher at SmartWealth.ai, said that the September FOMC meeting minutes confirmed expectations of a “prolonged inflationary bias” and a continued reduction in the Fed’s balance sheet, both of which helped support gold prices.

On the international market, Comex gold futures for December delivery closed slightly higher at USD 4,000.4 per ounce, after touching USD 4,081 midweek. Spot gold also rose 1.06 percent to USD 4,018.30 per ounce, before reaching a record USD 4,059.34 per ounce.

Safe-Haven Demand And Caution Drive Market Moves

According to Riya Singh, Research Analyst, Commodities & Currency at Emkay Global Financial Services, “the week began with safe-haven demand as investors hedged against US fiscal risks and uncertainty over Fed policy. But sentiment shifted midweek as traders booked profits.”

Despite some cooling in momentum, gold remains on track for its eighth straight weekly gain, up nearly 14 percent this quarter. Singh said this reflects “strong investor demand for tangible assets” amid concerns over US debt surpassing USD 36 trillion and rising inflation despite slower growth.

Silver’s Historic Rally Continues With Volatility

Silver extended its remarkable rally but with extreme volatility. On the MCX, silver gained Rs 722 (0.49 percent) last week, hitting a record Rs 1,53,388 per kilogram on Thursday.

Globally, Comex silver futures for December delivery touched USD 49.96 per ounce, while spot silver briefly breached USD 51 per ounce, its highest level since 1980, before settling near USD 50.29.

Riya Singh noted that silver has been the “standout performer of 2025,” rising about 70 percent year-to-date, powered by industrial demand, speculative buying, and safe-haven flows.

London Market Tightness Adds To Price Surge

Severe shortages in the London bullion market have fueled more price swings. The one-month lease rate jumped to 11%, the highest since 2022, signaling a shortage of lendable silver.

Strong shipments of bullion to the US over tariff concerns drained London inventories to multi-year lows. Singh added that this flipped the usual market pattern, with premiums of up to USD 2.50 per ounce over Comex futures.

She concluded, “The tight supply and ongoing global uncertainty could keep silver prices firm, though volatility will remain high as speculative long positions reach record levels.”