Gold concluded the trading session with a 0.68% increase, reaching Rs 154,506. This uptick was bolstered by a depreciating US dollar and diminished anticipations regarding a Federal Reserve rate increase, following inflation data from the US that largely met expectations. US CPI inflation moderated to 3.4% year-on-year in July, down from 3.5% in June, indicating a second successive month of diminishing annual inflation. Additionally, an unforeseen drop in July nonfarm payrolls has further tempered expectations regarding tighter monetary policy. Markets currently assign a 31% likelihood to a rate hike in September, a significant decrease from approximately 55% the previous week, as the Federal Reserve is largely anticipated to uphold the policy-rate range of 3.50%-3.75%.
However, Chicago Fed President Austan Goolsbee emphasised ongoing inflation concerns, which may constrain gold’s potential for appreciation. Geopolitical uncertainty persists at a high level as the US and Iran remain in a stalemate regarding attempts to resolve their five-month-old conflict, while the ongoing tensions in the Strait of Hormuz continue to create a backdrop of relative safety. Physical demand in Asia has remained subdued, as elevated bullion prices have dissuaded consumption. Indian gold discounts expanded to $62 per ounce, marking the highest level in over two months, whereas China experienced fluctuations from a $2 discount to a $5 premium.
India’s net gold imports decreased by 23% year-on-year, totalling 98.1 tonnes in the second quarter of 2026, while domestic gold demand experienced a decline of 6%, amounting to 131.4 tonnes. In the second quarter, global gold demand held firm at 1,268.9 tonnes, driven by a significant increase in central-bank purchases, which reached 289 tonnes—five times the levels observed in the first quarter. This surge effectively counterbalanced the 45 tonnes of outflows from exchange-traded funds.
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. Fresh buying was observed as open interest rose by 0.33% to 9,798 contracts, coinciding with a price increase of Rs 1,040. Gold exhibits support at Rs 152,640, with a breach below this threshold potentially leading to a decline toward Rs 150,770. Conversely, resistance is established at Rs 155,665; a sustained movement above this level could aim for Rs 156,820.
