T
he trigger wasn't war news or a rate reduction; rather, it was an announcement about a bond repurchase program.
"The yellow metal is trading above $4,500 for the first time in the month of June, following a drop in US Treasury and US dollar," said Manav Modi, Commodities Analyst, Motilal Oswal Financial Services.
And in less than a week, the global development had already made its way through into India, with MCX futures crossing ₹1.60 lakh per 10 grams.
The source of the impetus was something unconventional — US debt management and not geopolitical factors.
The US Treasury said it will increase the scale of buybacks of long-term bonds from $2 billion to $4 billion starting September 9, which was aimed at offering liquidity assistance to long-end bonds.
That one step had a huge impact. According to Modi, the decision took the 30-year US Treasury yield from the two-decade high to 5.19%, which weighed on the US dollar and removed one of the big hurdles for gold prices.
A decline in the value of the US dollar makes the precious metal cheaper for non-US currency holders, while a fall in yields reduces the cost of holding a non-interest-bearing investment such as gold.
The magnitude of this action has been truly impressive.
Gold broke $4,550 and silver hit $67 in the international market, thanks to the weakening of the dollar, while Comex gold was trading at $4,552.50 an ounce, up $7.20 from the previous session.
This is only a day after gold hit $4,525.79 an ounce before falling slightly, while US gold futures were at $4,545.60.
Gold rose over 4% just in one day of trading, which is truly impressive.
The rallies have been equally strong in Indian bourses.
Gold futures surged by ₹264 to reach ₹1.58 lakh due to weakness in the dollar. MCX Gold was trading around ₹1.58-₹1.59 lakh per 10 grams until Thursday.
Gold Futures on MCX started at ₹1,58,008 and then made an attempt to move beyond the resistance level to make new highs at ₹1,58,499 after breaching the ₹1,58,000 level in the previous day.
There were strong gains in Silver too. The spot silver futures contract on MCX began trading at ₹2,38,500 per kg, higher by ₹1,713 against previous close and hit a high of ₹2,41,167 in the session - the highest level for Silver since the beginning of the year.
This is not a one-day phenomenon but rather the latest stage in a rally that has been gradually rising since the start of the month of August.
As recently as ten days back, the price of MCX gold was around ₹1,52,050 per 10 grams, with the 24K gold mark up by a good 5.37% from August 1 to August 10.
But despite the fact that international prices kept rising, the MCX gold price was already trading below ₹1.55 lakh by August 18, but all of this changed after the news from Treasury.
The rate of MCX gold was already around Rs 1.54 lakhs per 10 grams prior to the recent increase in international prices, and hence an increase in the price to Rs 1.60 lakhs per 10 grams implies a profit of approximately Rs 6,000.
However, the move by the Treasury was not in isolation; there is another more known factor that has been quietly driving up the price of gold all through August.
The tension between the USA and Iran relating to the Strait of Hormuz crisis has maintained the level of safe-haven demand strong, as the gold rally seen through most of August 2026 occurred amid expectations for Fed rates and the uncertain geopolitics of Trump-Iran.
It is the combination of a falling dollar due to US domestic debt policy on one hand and geopolitical tension due to the conflict in the Middle East on the other.
As gold has made the news, the gains of silver can be described as more spectacular.
The futures prices of silver have hit an all-time high for the year at ₹4,20,048 per kg, as reported by Business Standard. This price reflects the level at which the price of silver is trading above $67 an ounce, marking the significant milestone in the case of silver.
Within the domestic market, the price of silver has witnessed a jump of over ₹4,000 in one go because of the fall in bond yields in the US.
It won't be everybody's expectation for the rally to continue on this linear path.
As per Analyst Ilya Spivak, the gold rally will continue its positive trend as long as prices remain above the 4,400-4,500 levels after the rally, implying that the level has become an important level for the ongoing bull-run.
The domestic factor is also present. The analysis provided by ICICI Bank highlighted that gold can face pressure in case of a hawkish approach by RBI that could result in earlier-than-expected rate increases amid oil and food price inflation.
Speaking of the technical aspect, Ponmudi R, CEO at Enrich Money, identified important levels for future MCX Gold, highlighting that the breakout above the resistance at ₹2,41,000 will allow the price to rise up to ₹2,45,000-2,46,000, whereas the decline below certain support levels may result in a reversal.
As far as retail purchasers of gold are concerned, the analysts’ advice has been largely consistent throughout this period.
According to Motilal Oswal, for the long-term investor, the current rally reinforces the need to stay invested in gold, although jumping on to it after one day’s rally poses a problem of timing, which makes phased investments more appropriate than lump sum investments.
From the perspective of jewellery purchases, many analysts recommend a phased purchase rather than a lump sum purchase in view of the extent of rally that has happened in just the last two to three weeks.
