Gold Resumes Winning Streak on US Economic Concerns
Gold prices staged a strong comeback on Tuesday, November 25, breaking their recent losing streak as disappointing economic indicators from the United States revitalized investor interest in the safe-haven asset. The December futures contract on the Multi Commodity Exchange (MCX) climbed significantly, reaching an intraday peak of ₹125,521 per 10 grams, marking a solid 1.3% gain.
Weak US Data Drives Gold Rally
The resurgence in gold prices directly responded to a series of underwhelming economic reports from the United States that strengthened market expectations for a Federal Reserve interest rate reduction in December. Recent data revealed that US retail sales increased by only 0.2% in September, significantly slowing from August's 0.6% growth and falling short of the anticipated 0.4% expansion.
Compounding the economic concerns, the ADP employment report showed private employers eliminating an average of 13,500 jobs weekly during the four weeks ending November 8. This represented a substantial deterioration from previous weeks' performance and indicated growing weakness in the American labor market.
Federal Reserve Officials Signal Support for Rate Cuts
The gold market received additional momentum from comments by Federal Reserve officials who expressed support for monetary policy easing. Fed Governor Christopher Waller recently endorsed a December rate cut, pointing to persistent softness in the US employment sector. His position found support from other Fed presidents, including San Francisco's Mary Daly and New York's John Williams.
Market participants have dramatically increased their bets on a December rate cut, with probability assessments jumping to 81% for a 25 basis point reduction from approximately 40% just one week earlier. This shift in expectations contributed to bullion's nearly 2% surge on Monday preceding Tuesday's continued strength.
Axis Securities Bullish on Long-Term Gold Prospects
Domestic brokerage firm Axis Securities has outlined an optimistic long-term outlook for gold, projecting price targets between ₹1.40 lakh and ₹1.45 lakh by 2026. The firm's analysis indicates that gold maintains a robust structural uptrend on monthly charts, with a decisive breakout above the critical resistance zone of ₹101,500–₹106,000.
According to Axis Securities, the current price trades comfortably above both the 9-month and 60-month simple moving averages, confirming sustained institutional buying and long-term trend strength. The brokerage noted that gold recently achieved a fresh lifetime high near ₹132,000 following the breakout.
The firm maintains that as long as gold prices remain above ₹102,000, the broader trend will continue bullish with potential for further appreciation. They suggest traders consider accumulating gold during price dips in the ₹117,000–₹108,000 range, anticipating significant upside potential over the coming years.
While producer price figures indicated inflation pressures generally aligned with expectations, the combination of weak retail data, employment concerns, and supportive comments from Fed officials created ideal conditions for gold's recovery. Investors continue monitoring US economic indicators and Federal Reserve communications for further direction on interest rate policy and its impact on precious metal prices.
