Gold prices increased by 0.61% to Rs 1,20,522, bolstered by a prevailing risk-off sentiment as investors gravitated towards safety in response to declines in global equities, especially within the AI and technology sectors. The yellow metal’s potential for appreciation was constrained by waning expectations regarding additional U.S. rate cuts, following indications from several Federal Reserve officials that the recent decrease may represent the final adjustment for this year. The likelihood of an additional rate cut in December has decreased to 69%, down from 90% prior to the FOMC meeting.
In the interim, the alleviation of trade tensions alongside China’s choice to eliminate tax exemptions for specific retailers could temper the robust gold-buying trend observed in the world’s foremost consumer market. In India, gold experienced a discount of up to $12 per ounce, a notable shift from the previous week’s premium of $25, attributed to a decline in demand following the festival season.
In contrast, various Asian hubs experienced stable to increasing premiums, with China trading at par to a $4 premium, while Singapore and Hong Kong exhibited minor markups. In the third quarter, global gold demand experienced a notable increase of 3% year-on-year, reaching a record high of 1,313 tons. This surge was primarily fueled by a significant 17% rise in demand for bars and coins, predominantly from India and China.
ETF inflows experienced a significant increase of 134%, counterbalancing a 23% decline in jewellery demand. Central banks continued to be net buyers, raising their purchases by 10% to 219.9 tons. There was a notable increase in fresh buying, evidenced by a 1.7% rise in open interest to 13,562, alongside a price gain of Rs 725. Support is positioned at Rs 1,20,060 and Rs 1,19,595, whereas resistance is identified at Rs 1,20,830 and Rs 1,21,135.