Gold settled down 0.39% at Rs 1,50,710, influenced by expectations of additional tightening from the US Federal Reserve, as robust economic activity and increasing inflationary pressures bolstered a hawkish policy perspective. In September, US business activity surged to a level not seen in over five years, with supply constraints playing a significant role in driving prices upward. New York Fed President John Williams suggested that an additional rate hike before the end of the year may be warranted, thereby intensifying pressure on bullion even as structural support remains intact.
Standard Chartered observed that demand from the official sector continues to be robust, while Goldman Sachs maintained its end-2027 gold forecast at $5,400 per ounce, although cautioning that further Federal Reserve rate hikes could hinder short-term gains. In a more hawkish scenario that includes three additional rate hikes, Goldman Sachs has projected that gold may decline to approximately $4,070 before rebounding to around $4,200 by the end of 2026, bolstered by central bank purchases that are expected to offer support. Physical market flows exhibited a mixed trend, as Swiss gold exports surged by 65% month-on-month in August. This increase was primarily driven by shipments to the UK, which totalled 102.1 tonnes, marking the highest monthly level in seven years.
Shipments to China experienced a notable increase of 20%, reaching 26.1 tonnes, whereas deliveries to India saw a significant decline of 58%, totalling 3.5 tonnes. China’s net gold imports via Hong Kong increased to 58.491 tonnes from 56.193 tonnes in July, as the central bank continued its gold purchases for the sixth consecutive month in August, sustaining a 22-month buying streak. Indian demand remained lacklustre as purchasers anticipated reduced prices, whereas Chinese premiums continued to be bolstered by investment demand. London vault holdings reached 9,534 tonnes at the end of July, reflecting a month-on-month increase of 0.74% and valued at around $1.2 trillion.
Technically, the market continues to experience long liquidation, as evidenced by a decline in open interest of 11.61% to 5,807, alongside a price decrease of Rs 589. Gold is presently encountering support around Rs 1,50,110, and a decline beneath this threshold may reveal Rs 1,49,510. On the upside, resistance is observed near Rs 1,51,330, while a sustained movement above this level could pave the way toward Rs 1,51,950.
