Gold Prices Hit Record High Ahead of Fed Policy Decision – Should You Invest Now?
Gold rates surged to fresh all-time highs on September 16, 2025, as global investors turned to the safe-haven asset ahead of the U.S. Federal Reserve’s much-anticipated monetary policy meeting. Both international and domestic markets witnessed a sharp uptick in yellow metal prices, signaling strong investor interest amid global economic uncertainty.
Global and Domestic Gold Market Update
In the international market, spot gold rose by 0.3% to touch $3,688.41 per ounce, while gold futures climbed 0.2% to $3,726 per ounce. In India, prices on the Multi Commodity Exchange (MCX) edged up 0.10%, with gold trading at around ₹1.10 lakh per 10 grams, marking its highest level ever.
Experts suggest that the rally is being fueled by expectations of a possible interest rate cut from the U.S. Federal Reserve. Investors typically flock to gold during such times, as lower rates make non-yielding assets like gold more attractive.
Why Gold Is Rallying
According to Mohit Kamboj, former National President of the India Bullion and Jewellers Association (IBJA), investors continue to see gold as a safe and reliable asset during uncertain times. He added that the weakness of the Indian rupee against the U.S. dollar has further pushed up import costs, adding to the upward momentum in domestic gold prices.
Gold has been on an upward trend for several weeks, supported by global macroeconomic factors and strong investment demand. Earlier this year in April, gold had also touched a record high before witnessing a brief correction. Now, once again, prices are heading north.
Federal Reserve Policy in Focus
All eyes are currently on the Federal Reserve’s policy meeting, which begins on September 16, with the outcome expected late on September 17 (India time). Market expectations suggest a 0.25% rate cut, which would typically support gold prices as lower rates reduce the opportunity cost of holding bullion.
Financial analysts explain that whenever interest rates decline, investors prefer to allocate more funds to safe-haven assets such as gold, driving up demand and prices.
Scope for Profit Booking
However, not all experts are fully bullish. Darshan Desai, CEO of Aspect Bullion & Refinery, cautioned that if the Fed’s rate cut or commentary fails to meet investor expectations, gold could see a pullback. Since gold has already risen by around $250 per ounce in recent weeks, profit booking is also a possibility. According to him, any such dip could present a good buying opportunity for long-term investors.
What Should Investors Do?
Financial advisors recommend that investors should ideally allocate 10–15% of their portfolio to gold. This not only acts as a hedge against inflation and currency fluctuations but also helps diversify risk in uncertain economic conditions.
Retail investors who have little or no exposure to gold are being advised to gradually build positions. With digital options such as Gold ETFs and gold mutual funds, investing has become much more convenient. For those preferring a disciplined approach, Systematic Investment Plans (SIPs) in gold are also available, allowing small but consistent contributions over time.
The Bottom Line
Gold’s rally is being driven by global monetary policy expectations, a weaker rupee, and safe-haven demand. While prices are at record highs, market volatility could create short-term corrections. Experts suggest investors view such corrections as entry points rather than risks.
For now, maintaining a balanced exposure to gold remains the most prudent strategy, ensuring that your portfolio stays protected against market shocks while benefiting from potential long-term gains.
