MCX gold prices have surged more than 13% in Aug. so far, with the rally gathering pace in the second half of the month as a weaker US dollar, changing Federal Reserve rate expectations, and renewed safe-haven demand lifted bullion prices.
Data from the Multi Commodity Exchange showed gold futures for the Oct. 5 expiry rising from a close of Rs 1,43,376 per 10 grams on July 31 to Rs 1,62,438 per 10 grams on Aug. 21. This represents a gain of Rs 19,062, or 13.3%, in the period.
The contract has risen sharply despite some intermittent volatility. It crossed Rs 1.50 lakh on Aug. 7 and moved above Rs 1.60 lakh on Aug. 20 before closing at a record-high level of Rs 1,62,438 on Aug. 21, according to the MCX data.
Key Reasons Behind the Rally
1. Weaker US Dollar
A softer US dollar has been a key support for global gold prices. The dollar fell to a two-month low earlier in Aug. as weaker US economic data reduced expectations of an immediate Federal Reserve rate hike.
Since gold is priced in dollars, a weaker greenback makes the metal relatively cheaper for buyers holding other currencies, supporting demand.
2. Fed Rate Cut Expectations
Investors’ expectations around US monetary policy have also changed, which has been pushing gold prices up. Markets have reduced bets on further monetary tightening as economic data has shown signs of moderation.
Gold typically benefits when there is a fall in interest-rate expectations because the opportunity cost of holding the non-yielding asset declines. Investors are therefore closely watching upcoming US economic data and signals from the Federal Reserve.
3. Fall In US Treasury Yields
A sharp decline in US Treasury yields provided another major trigger for the rally. The US Treasury’s Aug. 19 announcement that it would double buybacks of longer-dated Treasury debt pushed yields lower and weakened the dollar.
Gold prices subsequently jumped more than 3% that day, giving the domestic MCX contract another boost.
4. Geopolitical Uncertainty
Ongoing uncertainty around the Iran conflict, the Strait of Hormuz, and energy markets has been another reason why investors are resorting to gold. The yellow metal works as a safe haven for investors during times like this.
Such developments can quickly increase demand for bullion, particularly when concerns about inflation, growth or financial-market volatility rise simultaneously.
Also Read: Gold, Silver Scale Over 3-Month Highs As Weak US Dollar Fuels Safe-Haven Rush
5. Central Bank Buying
Central-bank demand remains an important structural support for gold prices. Central banks bought 289 tonnes of gold in the second quarter of 2026, the highest quarterly purchase on record, according to World Gold Council data cited by Reuters.
Continued accumulation by central banks, along with investment demand from major Asian markets, has strengthened the longer-term case for gold and helped keep prices elevated even during periods of short-term profit-taking.
6. Indian Festive Demand Kicking In
India’s upcoming festive and wedding season is beginning to provide additional support to gold demand. Jewellery buying has picked up as consumers return to the market, while jewellers and manufacturers have started replenishing inventories ahead of the festive period, according to the World Gold Council.
What Next For MCX Gold?
With the dollar outlook, US interest-rate expectations, Treasury yields, and geopolitical risks continuing to influence global bullion prices, gold could remain sensitive to incoming macroeconomic data. Strong central-bank buying provides additional structural support. For MCX gold, currency movements will also remain important, as any further weakness in the rupee could amplify gains in domestic prices. After the sharp Aug. rally, however, bouts of profit-taking and volatility cannot be ruled out.
ALSO READ: Gold Price Crosses Rs 1,61,000 Per 10 Grams On MCX. Can It Hit Rs 2,00,000 Soon?
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