Gold settled down 0.21% at Rs 162,882, influenced by profit-taking and a stronger dollar in anticipation of the U.S. Personal Consumption Expenditures inflation data and Federal Reserve Chair Kevin Warsh’s comments at the Jackson Hole symposium. Despite the recent short-term correction, the fundamental investment demand continued to show resilience, as evidenced by gold-backed ETFs which garnered 46.7 tonnes valued at $6.4 billion last week, representing their most significant weekly inflow in a span of 10 months.
Markets are currently assigning a 40% likelihood to a rate hike in the U.S. for September, with the remaining 60% anticipating that rates will stay the same, thereby maintaining a heightened level of uncertainty surrounding monetary policy. In Asia, China’s net gold imports via Hong Kong increased by 11% month-on-month, reaching 56.193 tonnes in July. Concurrently, the People’s Bank of China acquired 19.9 tonnes, marking its most significant monthly addition since October 2023. However, physical demand in India remained subdued, with dealers offering discounts of up to $65 per ounce as elevated prices discouraged retail buying.
India’s net gold imports decreased by 23% year-on-year, totalling 98.1 tonnes in the June quarter, while overall demand experienced a decline of 6%, reaching 131.4 tonnes. In the second quarter, global gold demand held steady at 1,268.9 tonnes, bolstered by central bank acquisitions totalling 289 tonnes, a fivefold increase compared to the first quarter. London vault holdings reached 9,464 tonnes at the end of June, reflecting a month-on-month increase of 0.77%. India’s elevated 15% import tariff has simultaneously fostered unofficial inflows while exerting pressure on organised market participants.
Gold is currently experiencing long liquidation, as evidenced by a 3.86% decline in open interest to 10,134, alongside a price drop of Rs 347. Immediate support is positioned at Rs 161,780, succeeded by Rs 160,675, whereas resistance is observed at Rs 163,895 and Rs 164,905. A sustained break below support could extend the correction, whereas a move above Rs 163,895 may revive bullish momentum toward Rs 164,905.
