Why gold is extending gains and how market expectations are shaping its outlook

Gold prices continued their upward march on Thursday (November 13), with domestic and international markets reflecting strong investor appetite amid renewed expectations of US interest rate cuts and persistent geopolitical concerns.

In India, the price of 10 grams of gold stood at ₹1.27 lakh, marking an increase of ₹2,290 from the previous day.

In global markets, spot gold rose 0.4% to $4,214.52 per ounce at 0521 GMT, while US gold futures for December delivery inched up 0.1% to $4,218.20 per ounce — the highest since October 21.

Analysts attributed the rally to expectations of monetary easing by the US Federal Reserve and a weaker dollar.

“Gold is extending its winning streak driven by a weaker dollar, expectations of Federal Reserve rate cuts, and persistent central bank accumulation,” said Jigar Trivedi, Senior Research Analyst at Reliance Securities.

He added that while short-term consolidation was likely after the recent rally, “the broader outlook remains constructive,” with potential for prices to test levels above $4,300/oz by year-end if real yields remain subdued.

The move follows US President Donald Trump’s signing of legislation to end the longest government shutdown in US history, which began on October 1.

The reopening is expected to restart the release of key economic data, including payroll and inflation figures, offering the Federal Reserve updated inputs for its December policy meeting.

A Reuters poll showed 80% of economists expect the Fed to lower its key interest rate by 25 basis points next month to support a softening labour market.

Lower rates tend to benefit gold, which yields no interest, as investors seek safety in non-yielding assets during periods of economic uncertainty.

Year-to-date, gold prices have surged nearly 60%, reaching an all-time high of $4,381.21 an ounce on October 20, supported by geopolitical tensions, trade disruptions, and rate-cut expectations.

According to Rahul Kalantri, VP Commodities at Mehta Equities, bullion prices have turned technically stronger. “Gold has support at $4,140–$4,100 an ounce and resistance at $4,240–$4,265 an ounce,” he said.

Brokerage Emkay Wealth Management projected gold’s upside targets at $4,368 and $4,600 an ounce, with support levels at $3,890 and $3,510 an ounce. It noted that the 8% weakening of the US dollar over the past year has lifted commodity prices, while sustained ETF inflows of $65 billion this year and continued central bank buying have underpinned demand.

“The combination of dollar weakness, geopolitical tensions, and institutional buying is keeping gold attractive as a diversification tool,” Emkay Wealth said, adding that existing investors could consider holding positions and adding on dips.

-With Reuters inputs