Gold concluded the trading session with a 2.42% increase, reaching Rs 157,996, buoyed by a declining US dollar and a reduction in global bond yields. Market participants are now looking ahead to the forthcoming Federal Reserve meeting minutes for insights into the interest-rate trajectory, particularly in light of ongoing inflationary pressures. Geopolitical uncertainty bolstered safe-haven demand, as Trump asserted that no negotiations were in progress with Iran and emphasised that the waterway remained accessible, directly contradicting Iran’s assertion of its closure.
Markets are currently reflecting a 67% likelihood that the Fed will maintain its current interest rates, as expectations for an increase have diminished in light of a sequence of weaker economic indicators from the US. CFTC data indicated that COMEX gold net-long positions rose by 9,470 contracts in the week ending August 11, bringing total net-long positions to 141,868 contracts. This trend reflects sustained investor interest in gold, driven by geopolitical uncertainty and varying real interest rates. Physical demand exhibited relative weakness, especially in India, where gold discounts expanded to $62 an ounce, marking the highest level in over two months, as elevated prices constrained consumption.
India’s net gold imports experienced a year-on-year decline of 23%, totalling 98.1 tonnes in the June quarter. Concurrently, gold demand saw a reduction of 6%, amounting to 131.4 tonnes. In the second quarter, global gold demand held firm at 1,268.9 tonnes, bolstered by robust central-bank acquisitions totalling 289 tonnes, which counterbalanced 45 tonnes of outflows from ETFs. London vault holdings rose by 0.77% month-on-month, reaching a total of 9,464 tonnes, with an estimated value of around $1.2 trillion. India has also observed a surge in unofficial gold inflows subsequent to the elevation of import tariffs to 15%, as reported by the World Gold Council.
Technically, the market continues to experience new buying activity, as evidenced by an 8.71% increase in open interest to 10,451, alongside a price increase of Rs 3,734. Gold is currently finding support at Rs 154,855, and a breach of this level could lead to a decline toward Rs 151,715. On the upside, resistance is positioned at Rs 159,685, and a sustained movement above this threshold could catalyse additional gains toward Rs 161,375.
