(MENAFN- IANS) Mumbai, Oct 15 (IANS) Gold prices surged to a new record high on Wednesday, crossing Rs 1.27 lakh per 10 grams on the Multi-Commodity Exchange (MCX).

The rise came as global gold prices rallied on renewed US-China trade tensions and growing expectations of further interest rate cuts by the US Federal Reserve.

At the opening, MCX gold futures were up 0.52 per cent at Rs 1,26,915 per 10 grams, compared to the previous close of Rs 1,26,256.

Soon after, prices touched a fresh all-time high of Rs 1,27,500 per 10 grams. Silver prices also gained, opening 0.18 per cent higher at Rs 1,59,800 per kg and hitting an intra-day high of Rs 1,61,418.

During the early trade, gold was trading 0.46 per cent higher at Rs 1,26,835 per 10 grams, while silver was up 0.52 per cent at Rs 1,60,333 per kg.

In the international market, gold hovered near its record levels, supported by safe-haven demand.

Spot gold rose 0.4 per cent to $4,155.99 per ounce, while US gold futures for December delivery were up 0.3 per cent at $4,174.30 per ounce.

Gold has gained nearly 55 per cent so far this year and hit an all-time high of $4,179.48 on Tuesday.

Analysts say the rally in gold is driven by a mix of global uncertainties, expectations of US Fed rate cuts, strong buying by central banks, a global shift away from the dollar, and steady inflows into gold exchange-traded funds (ETFs).

Federal Reserve Chair Jerome Powell said on Tuesday that future rate decisions would be taken on a“meeting-by-meeting” basis, balancing inflation concerns with signs of a weakening labour market.

Investors are now expecting a 25-basis-point rate cut at the upcoming Fed meeting, with another likely in December.

Adding to gold's momentum, trade tensions between the US and China have escalated again. US President Donald Trump said Washington is considering cutting some trade ties with China, including in cooking oil, after both countries imposed new port fees on each other this week.

Experts believe that the combination of geopolitical uncertainty, policy easing expectations, and ongoing market anxiety -- including the US government shutdown -- is driving investors toward the safety of gold, pushing prices to record highs.

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