Gold settled down 0.42% at Rs 158,996 as investors evaluated new US economic data for insights regarding the Federal Reserve’s interest-rate trajectory. The US PCE price index experienced an increase of 0.2% in July, surpassing the anticipated figure of 0.1%. Concurrently, annual inflation saw an uptick to 3.7%, compared to the forecasted rate of 3.6%. Core PCE rose by 0.2% on a month-on-month basis and 3.3% on a year-on-year basis, aligning with forecasts. Consumer spending and personal income surpassed forecasts, while US GDP grew by 1.5% in Q2, consistent with the initial estimate. Additionally, durable goods orders increased by 1.1% in July, exceeding expectations of 0.5%.
According to the data, markets are currently pricing in approximately a 60% likelihood that the Fed will maintain interest rates at their current levels next month, a slight decrease from the previous 64%. This adjustment is likely to constrain immediate support for gold. Meanwhile, geopolitical developments continued to be significant as Iran announced the resumption of talks with Oman regarding the management of the Strait of Hormuz, in the context of ongoing economic pressure from the US. Physical demand in India has continued to be lacklustre, as elevated prices approaching three-month peaks have deterred retail purchases.
Dealers are now providing discounts of up to $65 an ounce relative to official domestic prices, a slight increase from the previous $62. In China, bullion traded from flat to a $6 premium, indicating a consistent yet price-sensitive demand. Gold in Japan, Hong Kong, and Singapore also exchanged at relatively modest discounts compared to premiums. London vault holdings reached 9,464 tonnes at the conclusion of June 2026, reflecting a month-on-month increase of 0.77%. This amount is valued at roughly $1.2 trillion and corresponds to approximately 757,145 gold bars.
Technically, the market is experiencing renewed selling pressure, as evidenced by a 26.97% increase in open interest to 12,160, coupled with a price decline of Rs 667, suggesting heightened participation on the downside. Gold is presently encountering support at Rs 156,820, and a persistent breach beneath this threshold may prolong the downturn toward Rs 154,650. On the upside, resistance is positioned at Rs 161,030, and a decisive move above this threshold could catalyse a recovery toward Rs 163,070.
