Gold prices settled down 0.83% at Rs 1,53,094 as market participants assessed the implications of escalating tensions in the Middle East on inflation and interest rates. Iran and the US have engaged in a new round of threats, while Standard Chartered observed that demand from the official sector and underlying structural factors persist in bolstering gold, albeit with a potential moderation in the rate of appreciation. In August, Swiss gold exports experienced a significant increase of 65% compared to the previous month. Shipments to the UK soared to 102.1 tonnes, up from 39.5 tonnes.
Meanwhile, deliveries to China saw a 20% rise, reaching 26.1 tonnes, whereas exports to India fell sharply by 58%, totalling 3.5 tonnes. Indian demand has shown signs of weakness as purchasers hold out for more favourable pricing, with dealers now offering discounts of up to $60 per ounce, a reduction from the previous $75. However, the approaching Dussehra and Diwali festivals may bolster physical demand. In China, gold premiums have contracted to $5 per ounce from $8, bolstered by strong investment demand. Meanwhile, the People’s Bank of China has augmented its gold reserves for the sixth consecutive month in August, thereby extending its buying streak to 22 months.
London vault holdings reached 9,534 tonnes at the end of July, reflecting a month-on-month increase of 0.74% and valued at approximately $1.2 trillion. Goldman Sachs maintained its end-2027 forecast of $5,400 per ounce, indicating that while tighter monetary policy may impede short-term gains, it is unlikely to change the long-term outlook, as central-bank diversification continues to be a significant structural driver.
Technically, the market is experiencing long liquidation, as evidenced by a 3.67% decline in open interest to 7,804, alongside a price drop of Rs 1,287. Gold is presently encountering support at Rs 1,52,610, and a persistent breach beneath this threshold may reveal Rs 1,52,125. On the upside, resistance is positioned around Rs 1,53,865, and a decisive movement above this threshold could pave the way toward Rs 1,54,635.
