Gold and silver prices rebounded on Monday to scale fresh record highs in the domestic futures market, tracking a rally in the global markets fuelled by weak US labour data and rising expectations of an interest rate cut by the Federal Reserve.

On the Multi Commodity Exchange (MCX), gold futures for October delivery climbed Rs 452 or 0.42 per cent to touch a fresh lifetime peak of Rs 1,08,180 per 10 grams. Similarly, the December contract advanced Rs 370 or 0.34 per cent to breach the Rs 1.09 lakh mark per 10 grams.

"Gold took positive cues with gains to hit a record high of Rs 1,08,000 per 10 grams on MCX, after last week's weak non-farm payrolls data strengthened expectations of a Fed rate cut in the upcoming policy meeting. Tariff uncertainties along with firm rate cut expectations continue to provide strong support to precious metal prices," Jateen Trivedi, VP Research Analyst - Commodity and Currency at LKP Securities, said.

Silver futures also staged a strong comeback. After slipping in early trade, the December contract rallied Rs 1,703 or 1.36 per cent to touch a lifetime peak of Rs 1,26,400 per kilogram on the MCX.

This week, investors will closely track US macroeconomic data, including Producer Price Index and Core Consumer Price Index reports, which will play a key role in guiding trend and volatility for the bullion prices, Trivedi said.

In the spot market, however, profit-booking weighed on the bullion prices. Gold prices of 99.9 per cent purity retreated from a record level to trade at Rs 1,07,670 per 10 grams, down by Rs 200 in the national capital on Monday.

The precious metal of 99.5 per cent purity also fell by Rs 200 to Rs 1,06,800 per 10 grams (inclusive of all taxes). Silver came under selling pressure, tumbling by Rs 1,000 to Rs 1,26,000 per kg (inclusive of all taxes) in New Delhi.

In global markets, gold extended its record-breaking run. Comex gold futures for December delivery jumped to a fresh peak of USD 3,662 per ounce, while spot prices gained USD 35.11 or 1 per cent to hit a record high of USD 3,621.92 per ounce.

"Gold prices have surged to record highs, driven by disappointing US labour data and growing expectations of a September rate cut, which have boosted investor demand," said Chintan Mehta, Chief Executive Officer at Abans Financial Services.

The American economy added only 22,000 jobs in August, reinforcing the likelihood of multiple rate cuts this year.

"In response, the US Treasury yields have slipped to multi-month lows, while a weaker dollar has further enhanced gold's appeal as a safe-haven asset," Mehta said.

According to Renisha Chainani, Head - Research at Augmont, gold attracted safe-haven flows last week due to uncertainties around legal challenges to broad US import tariffs and worries over stretched government debt in developed nations that raised sovereign yields.

"Gold and silver saw gains of 4 per cent and 2 per cent in the global markets, respectively, driven by rate-cut expectations, heightened political risks, a steepening yield curve, and worries about the US Federal Reserve's independence," Chainani said.

Additionally, Comex silver futures firmed up, with the December delivery contract up nearly 1 per cent at USD 41.92 per ounce and spot silver was trading 0.7 per cent higher at USD 41.29 per ounce in the overseas markets.

Riya Singh, Research Analyst - Commodities and Currency at Emkay Global Financial Services, said, "Even central banks are turning toward silver, with the Saudi central bank reportedly investing USD 40.4 million in silver-related ETFs, adding strategic weight to its appeal.

"The dual nature of silver, as both a monetary hedge against inflation and a high-demand industrial metal, remains a defining tailwind, especially with solar-related demand from China and India surging more than 70 per cent year-on-year in H1 2025," Singh said.

On the market outlook, Goldman Sachs said in a note that gold could rally towards USD 5,000 per ounce if the Fed's independence comes under threat and investors move even a small share of holdings from Treasuries to bullion.

Except for the headline, this story has not been edited by The Telegraph Online staff and has been published from a syndicated feed.