Gold concluded the trading session with a 1.1% increase, reaching Rs 1,52,470. This uptick occurred as the momentum in oil prices and bond yields began to wane in anticipation of the forthcoming US Federal Reserve policy decision. Additionally, persistent supply disruptions in the Middle East have continued to bolster oil prices, even in the face of an unexpected rise in US crude inventories. The Federal Reserve unanimously increased the federal funds target range by 25 basis points to 3.75%-4.00% in September 2026, signifying its initial rate hike since 2023. Policymakers emphasised the persistence of elevated inflation and reaffirmed their commitment to steering inflation back to the 2% target. Updated projections indicated that 16 of 18 officials perceive the potential for at least one more 25-basis-point hike later this year, while four officials forecast two additional increases, thereby maintaining the interest-rate outlook as a significant factor affecting gold.
The Bank of Japan is anticipated to increase borrowing costs, while the Bank of England is projected to maintain current rates. Goldman Sachs maintained its end-2026 fair-value forecast of $4,900 per ounce, highlighting potential upside risks stemming from sustained robust demand from central banks, while cautioning that the trajectory may experience volatility. Renewed ETF inflows and elevated call-option positioning may enhance rallies through dealer hedging, while stronger Fed rate-hike expectations could lead to more pronounced pullbacks. COMEX gold speculators decreased their net long positions by 1,263 contracts, bringing the total to 139,548 for the week ending September 8.
Physical demand in India has shown signs of weakness amid fluctuating prices, with dealers now providing discounts of up to $75 per ounce, a notable increase from the previous $54. In contrast, Chinese bullion is trading at a $8 premium over the global benchmark, indicating a robust investment appetite. Gold in Singapore fluctuated between a $1 discount and a $1.70 premium, whereas prices in Hong Kong varied from a $0.50 discount to a $1.70 premium. In Japan, trading occurred within a range of a $0.25 discount to a $0.50 premium.
London vault holdings reached 9,534 tonnes at the end of July, reflecting a month-on-month increase of 0.74% and a valuation of $1.2 trillion. Gold is currently experiencing short covering, evidenced by a 4.15% decline in open interest to 8,818, alongside a price increase of Rs 1,661. Support is positioned at Rs 1,51,630, with a breach below indicating an opening at Rs 1,50,790, while resistance is identified at Rs 1,53,130, beyond which prices may approach Rs 1,53,790.
