At $4,000 an ounce, gold is on fire: What should Indian buyers do now?

Gold soared to a fresh record near $4,000 an ounce as a prolonged U.S. government shutdown, political upheaval in France, and uncertainty in Japan rattled financial markets and pushed investors toward safe-haven assets.

Bullion jumped to $3,977.44 an ounce after a 1.9% gain on Monday, with spot prices hovering around $3,964 early Tuesday in Singapore. The rally puts gold on course for its largest annual gain since 1979.

The U.S. government shutdown, now in its second week, has halted the release of critical economic data, leaving investors guessing about the Federal Reserve’s next move. Traders are still pricing in a quarter-point rate cut this month, which typically supports non-yielding assets like gold.

In Europe, French Prime Minister Sebastien Lecornu resigned after failing to secure a budget consensus, deepening fiscal concerns in the eurozone’s most indebted major economy. Markets in Japan also reacted to the anticipated rise of Sanae Takaichi as the next prime minister.

“A mix of retail (especially in Europe and Japan) and institutional inflows have driven” the latest rally, said Nicky Shiels, head of metals strategy at MKS PAMP SA.

In India, the world’s second-largest gold consumer, retail demand is showing signs of hesitation. Prices in local markets have climbed to a record ₹108,000–₹110,000 per 10 grams, amplified by rupee depreciation. Industry watchers note that with key festive and wedding seasons approaching, households may delay or reduce purchases, even as investment interest holds steady.

Donald Trump’s aggressive global trade policies and geopolitical posture earlier this year are also being cited as underlying drivers of the safe-haven surge. Central banks and gold-backed ETFs have continued to accumulate gold, reinforcing the upward momentum.