Gold prices settled 1.02% lower at Rs 151,230, influenced by a surge in oil prices that heightened inflation concerns and bolstered expectations of a U.S. Federal Reserve rate hike at this week’s policy meeting. Markets are currently reflecting an 87% probability of a rate hike, a significant increase from the 67% observed prior to last week’s inflation data. Additionally, the anticipation of a Bank of Japan rate increase on Friday has further bolstered the outlook for tighter global monetary policy.
Rising energy prices and ongoing tensions in the Middle East have continued to dampen sentiment, as Iran-Gulf diplomacy encounters obstacles following the postponement of a scheduled meeting. For the week ended September 8, COMEX gold speculators reduced net long positions by 1,263 contracts to 139,548, indicating a degree of moderation in bullish positioning. Physical demand in India has shown a lacklustre performance, as fluctuating domestic prices have deterred purchases. Dealers are now providing discounts of up to $75 an ounce, a notable increase from the previous $54.
In contrast, Chinese bullion demand exhibited resilience, with gold trading at a $8 premium to the global benchmark, in comparison to premiums ranging from $3.50 to $9 observed last week. Markets in Singapore, Hong Kong, and Japan exhibited trading patterns confined to narrow ranges between discount and premium. London vault holdings reached 9,534 tonnes at the conclusion of July 2026, reflecting a month-on-month increase of 0.74% and valued at roughly $1.2 trillion, which corresponds to about 762,723 gold bars.
Technically, the market continues to experience long liquidation, as evidenced by a 1% decline in open interest to 9,522, alongside a price drop of Rs 1,554, which suggests a decrease in existing long positions. Gold is presently encountering support around Rs 150,180, and a sustained breach beneath this threshold may catalyse additional weakness toward Rs 149,135. On the upside, immediate resistance is positioned around Rs 151,860, and a decisive move above this threshold could bolster the recovery toward Rs 152,495.
