Gold settled sharply higher by 2.21% at Rs 155775, supported by a retreat in the US dollar and Treasury yields after dovish comments from Federal Reserve officials reduced expectations of an immediate rate hike. Fed Governor Christopher Waller indicated that he could support keeping rates unchanged at the September meeting if August inflation data confirms continued improvement, while New York Fed President John Williams also pointed to easing inflation pressures as tariff effects fade.
A weaker-than-expected ADP employment report further highlighted softness in the US labour market. Markets now price around a 50% probability of a September rate hike, down from about 62% before Waller’s comments, with Friday’s payrolls and next week’s inflation data likely to guide expectations. Meanwhile, Indian gold discounts widened sharply to as much as $135 per ounce, the deepest discount in three months, compared with $65 last week, amid weaker domestic demand and speculation that the government could reconsider the recent import duty increase from 6% to 15%. Chinese bullion traded at discounts of $2-$5, while Singapore, Hong Kong and Japan saw limited premiums or discounts. London vault holdings stood at 9,534 tonnes at end-July, up 0.74% month-on-month, valued at approximately $1.2 trillion and equivalent to around 762,723 gold bars.
Technically, gold is witnessing short covering as open interest declined 0.97% to 10,514 while prices gained Rs 3,373, indicating fresh buying support amid reduced bearish positioning. The market is holding above the immediate support zone of 153915, and sustained strength above this level could keep the bullish momentum intact. A break below Rs 153915 may trigger further correction towards Rs 152060, while on the upside, resistance is placed at Rs 156960. A decisive move above Rs 156960 could open the way towards Rs 158150, keeping the near-term outlook positive while Fed expectations and upcoming US economic data remain key drivers.
