Gold has hit a record Rs 1,22,780 per 10 grams on the MCX. International spot gold has crossed $4,000 an ounce. Prices have never been this high. Here is why the metal is rallying.

Three forces are at work. First, the US government shutdown has pushed investors toward safe assets. Second, hopes of a US rate cut have weakened the dollar, which helps gold. Third, geopolitical tensions, from Ukraine to the Middle East, keep demand strong.

Should you buy now? Indians buy gold for festivals, weddings and savings. At record prices, jewellery demand may slow. But for investors, experts say small, regular buys work better than chasing the peak.

Analysts warn the rally can pause. A strong dollar or an end to the US shutdown could cool prices. If the Fed cuts rates, though, gold could climb further. Avoid panic buying at all-time highs.

Jewellers say footfall has slowed as prices rose. Many buyers are waiting for a dip. Exchange schemes are seeing more interest. Analysts expect volatility to continue through the festival season.