Gold prices recovered on Monday, November 9, rising 0.74% to $4,100.38 after a Diwali dip and oil price cooling. According to NDTV, this recovery comes after days of volatility with prices surging following US midterm elections, while falling again when strong US jobs data raised expectations of Federal Reserve rate hikes in December. The recent surge has raised questions about gold's long-term upward momentum sustainability. Spot silver also gained 1.13% to $52.54 amid market volatility and US dollar weakness. In India, MCX gold December futures jumped 0.71% to ₹1,43,547 and MCX silver December futures surged 1.12% to ₹1,87,180. Gold's current decline comes as Brent crude fell 4.5% to $93.86 per barrel after US President Donald Trump struck a more conciliatory tone about Iran, saying it's "highly unlikely" he will order extensive strikes on the Islamic Republic.
Despite recent corrections, several global banks and brokerages remain optimistic about gold's prospects for 2027. As reported by CNBC TV18, JPMorgan has the most bullish forecast, expecting gold prices to reach $6,000 an ounce by year-end, representing a 46.34% increase from current market prices. UBS sees prices touching $5,200 by the second or third quarter of 2027. These forecasts are supported by continued central bank buying, with global central banks expected to purchase between 600 and 800 tonnes of gold. The World Bank projects gold averaging $4,250 in 2027 and $4,000 in 2028, following an expected 34% climb in 2026. China has maintained its buying spree for 23 consecutive months, providing further price support. Latest World Gold Council data shows central banks bought 321 tonnes in Q3 2026, up 42% from a year earlier, with total purchases of 675 tonnes in the first nine months.
Several factors continue to support the outlook for gold despite recent volatility. According to CNBC TV18, these include portfolio diversification, central bank purchases, inflation concerns, rising global debt and geopolitical uncertainty. The positioning of money managers is also relatively low following recent profit booking, leaving room for fresh accumulation if prices decline further. Markets are closely tracking US inflation data for further cues on gold prices, with the stronger-than-expected non-farm payroll data released on Friday increasing expectations of another US Federal Reserve rate hike in December. Lower US interest rates could also help gold, as gold pays no interest and looks relatively more attractive when yields fall.
Markets are pricing in a more than 80% probability of a 25-basis-point rate hike by the US Federal Reserve in December. As reported by CNBC TV18, this expectation has increased following the stronger-than-expected non-farm payroll data released on Friday. The potential rate hike could provide additional support for gold prices, as higher interest rates typically reduce the appeal of non-yielding assets like gold. However, the World Bank notes that lower US interest rates could also help gold, as gold becomes relatively more attractive when yields fall. The US Federal Reserve is expected to hike rates at its next meeting, with a tighter monetary policy typically creating downward pressure on gold prices.
Both oil and gold prices have moved inversely in 2026 as higher energy prices raised expectations of tighter monetary policy, creating headwinds for the non-yielding metal. According to NDTV, treasury yields and crude have tumbled in recent sessions as expectations grow over Democrats, after taking control of Congress, will push to end the conflict with Iran, with the government likely to less support for higher spending and borrowing. Meanwhile, China's central bank continued to increase its gold reserves in October, extending its buying streak to two consecutive years, as reported by Bloomberg. This continued buying provides additional price support despite the broader market volatility.
