In a significant development in the global gold market, China’s central bank has continued its buying spree for gold, marking the 11th consecutive month of increased gold reserves. This consistent purchase by China has played a crucial role in driving up the price of gold and silver. As of the end of September 2025, China’s gold reserves had grown to 74.06 million fine troy ounces. The increase in gold reserves is seen as part of China’s strategy to diversify its foreign exchange reserves, providing structural support to gold prices. Meanwhile, gold and silver prices on the Multi Commodity Exchange (MCX) in India are seeing an upward trend as well.
The Link Between US and China: Why Prices Are Rising
Gold and silver prices have been on the rise in the early hours of trading on the MCX. Gold is currently trading above ₹1.20 lakh per 10 grams, while silver is nearing ₹1.47 lakh per kilogram. Several factors, including actions by both China and the United States, are influencing these price movements.
China’s continued gold buying and the possibility of the US Federal Reserve cutting interest rates further have created a robust environment for gold and silver prices. The Federal Reserve has already indicated the possibility of two more rate cuts of 0.25% each this year. The potential reduction in interest rates makes precious metals more attractive, as they do not yield interest, thus increasing their appeal to investors. Additionally, Goldman Sachs has raised its gold price forecast, further supporting the strong momentum in the gold market.
Current Market Overview: Prices on the MCX
As of the latest market update, gold is trading at ₹1,20,820 per 10 grams for the December futures contract, showing a modest increase of 0.47% from the previous closing. Silver, for the December futures contract, is priced at ₹1,47,598 per kilogram, reflecting a slight increase.
Factors Behind the Surge in Prices
China’s Consistent Gold Buying
China’s central bank has continued to buy gold for the 11th consecutive month. As of September 2025, the country’s gold reserves increased to 74.06 million fine troy ounces. Analysts believe this ongoing trend signifies China’s strategy to diversify its foreign exchange reserves. This diversification provides long-term structural support to the price of gold, as more central banks shift their reserves toward precious metals like gold.
Goldman Sachs Raises Price Forecast
Goldman Sachs has raised its gold price forecast for December 2026, increasing its projection from $4,300 to $4,900 per ounce. This upward revision is attributed to strong investments flowing into exchange-traded funds (ETFs) backed by gold from Western countries. Additionally, central banks continue to purchase gold in large quantities, further contributing to the increase in demand and price stability in the gold market.
US Interest Rates Impact
The potential for two more 0.25% interest rate cuts by the US Federal Reserve this year has also contributed to the rising appeal of gold and silver. As interest rates fall, the yield on bonds and other fixed-income investments becomes less attractive, encouraging investors to shift towards non-interest-bearing assets like gold and silver. This shift in investment strategy provides support for the upward movement in the prices of these precious metals.
Trading Suggestions for Gold and Silver
Manoj Kumar Jain, a commodity research expert at Prithvi Finmart, has provided valuable insights into the support and resistance levels for gold and silver on the MCX. According to Jain, gold has support at ₹1,19,100 to ₹1,18,000 per 10 grams, with resistance levels at ₹1,21,000 to ₹1,22,200 per 10 grams.
For silver, Jain suggests that the support levels lie between ₹1,46,200 to ₹1,45,000 per kilogram, with resistance at ₹1,48,800 to ₹1,50,000 per kilogram. He advises that silver can be bought around ₹1,47,000, with a stop loss at ₹1,45,400 and a target price of ₹1,50,000.
The price of gold and silver has surged due to a combination of global economic factors, particularly actions by China and the United States. China’s ongoing gold purchases and the potential for interest rate cuts in the US have both contributed to the upward pressure on gold and silver prices. With Goldman Sachs raising its gold forecast and the demand from central banks continuing, the prices of these precious metals are expected to maintain their strong momentum in the coming months.
For investors, this provides a unique opportunity to capitalize on the rise in prices, as well as to hedge against potential economic uncertainties. The ongoing market dynamics suggest that gold and silver will continue to be attractive assets in the global financial landscape, driven by both institutional buying and investor demand. The MCX market’s price levels for gold and silver show that these metals remain a critical part of the global investment portfolio, with potential for further growth as the year progresses.
