Gold prices experienced a notable decline of 2.86%, closing at Rs 1,48,897. This drop reflects ongoing selling pressure, driven by increasing oil prices that have intensified inflation worries and bolstered anticipations of additional rate hikes by the Federal Reserve. The Fed recently increased its policy rate by 25 basis points to a range of 3.75–4%, with markets currently assessing a 68% likelihood of an additional hike in October. Cleveland Fed President Beth Hammack emphasised worries that ongoing inflation may become ingrained, necessitating a continuation of restrictive monetary policy.
Investors will pay close attention to US job openings, ADP employment, PCE inflation, and nonfarm payrolls for additional insights into the Federal Reserve’s trajectory regarding interest rates. Physical demand in India has seen a modest improvement following the recent price correction, especially in anticipation of the festive season. Discounts have narrowed to approximately $43 per ounce, down from $60 the previous week. Asian demand exhibited relative stability, with Singapore premiums ranging from 1.70 to 2.50, Hong Kong premiums between 1.70 and 2.00, and Japan experiencing trades between a $0.25 discount and a $0.50 premium.
London vault holdings rose by 0.74% month-on-month, reaching 9,534 tonnes by the end of July 2026. This amount is valued at approximately $1.2 trillion and is equivalent to around 762,723 gold bars. Goldman Sachs has upheld its gold forecast for the end of 2027 at $5,400 per ounce, attributing this to ongoing central-bank diversification as a fundamental support. However, it cautioned that a more hawkish Federal Reserve could lead to a correction toward $4,070, followed by a recovery to $4,200 by the end of 2026. Gold is currently experiencing renewed selling pressure, as evidenced by a 15.12% increase in open interest to 14,798, alongside a price decline of Rs 4,380.
This suggests a heightened level of participation amid the downward movement. The market is currently finding support near Rs 1,47,570, and a sustained break below this level could open the way toward Rs 1,46,245. On the upside, resistance is positioned around Rs 1,50,610, and a decisive movement beyond this threshold could initiate a recovery toward Rs 1,52,325. Overall, the near-term price action exhibits weakness, influenced by increasing yields, hawkish expectations from the Federal Reserve, and ongoing concerns regarding inflation.
