Gold prices concluded the trading session with an increase of 0.87%, reaching Rs 133,622, after momentarily achieving a new all-time high close to Rs 135,000, bolstered by anticipations of additional monetary easing in the United States. Sentiment has shown improvement as new indications of a cooling US labor market bolster the argument for prospective rate reductions. For the week ending December 6, jobless claims increased beyond expectations, reaching the highest level observed in over two months. This came after the Federal Reserve implemented its third 25 basis points rate cut of the year, accompanied by a significantly less hawkish posture. Chair Jerome Powell indicated that additional rate hikes are effectively off the table, prompting markets to price in two rate cuts in 2026, despite the Fed’s projections signaling only one.
The Federal Reserve has revealed intentions to acquire approximately USD 40 billion in short-term Treasury bills, a strategy aimed at alleviating pressures in the money markets. This action is anticipated to stabilize short-term yields and create a conducive environment for precious metals. The demand from central banks remained strong, as the People’s Bank of China augmented its gold reserves for the 13th consecutive month, reaching approximately 74.12 million troy ounces.
In October, global central banks increased their gold reserves by a net 53 tonnes, coinciding with gold ETFs experiencing their sixth consecutive month of inflows, primarily driven by robust purchasing activity from Asia. On the physical front, demand exhibited variability. In India, gold discounts have expanded in the context of unprecedented price levels, whereas demand from China has stayed subdued, influenced by market volatility.
From a technical perspective, the market is experiencing renewed buying interest, as evidenced by a 2.95% increase in open interest to 13,646, coupled with a price increase of Rs 1,153. Gold exhibits support at Rs 132,175; a breach beneath this level may challenge Rs 130,730. Resistance is identified at Rs 135,165, and a sustained movement above this level could potentially lead to a target of Rs 136,710.