Gold prices concluded the trading session with a decline of 0.25%, settling at Rs 1,52,716. This downturn was influenced by assertive indications from Federal Reserve policymakers, which bolstered anticipations of prolonged higher interest rates. The Fed raised rates by 25 basis points last week, with policymakers such as Alberto Musalem and Austan Goolsbee suggesting that additional tightening may be necessary to manage inflation fuelled by robust demand and increasing energy prices. Market expectations for a December rate hike have risen to 90%, up from 80% the previous week. Despite the challenges posed by monetary policy, gold maintains its structural support due to central bank purchases and ongoing geopolitical uncertainties.
Standard Chartered emphasised robust demand from the official sector, while Goldman Sachs maintained its end-2027 gold forecast at $5,400 per ounce, observing that tighter policy could temper the rally without undermining the longer-term trajectory. Goldman Sachs also cautioned that three further rate increases might drive gold prices to approximately $4,070 before a rebound toward $4,200 by the end of 2026, driven by ongoing central-bank acquisitions. In August, Swiss gold exports experienced a remarkable increase of 65% compared to the previous month. Notably, shipments to the UK escalated to 102.1 tonnes, a significant rise from 39.5 tonnes in July.
Additionally, deliveries to China saw a 20% uptick, reaching 26.1 tonnes. In contrast, shipments to India experienced a decline of 58%, totalling 3.5 tonnes, as domestic demand remained subdued in anticipation of the festive buying season. China’s central bank has augmented its gold reserves for the sixth consecutive month in August, thereby extending its purchasing streak to a total of 22 months. London vault holdings totalled 9,534 tonnes at the end of July, with a valuation of $1.2 trillion.
Technically, the market continued to experience long liquidation, as evidenced by a 7.01% decrease in open interest to 7,257 contracts, coinciding with a Rs 378 decline in prices. Gold is presently encountering support at Rs 1,51,705, and a persistent breach beneath this threshold may reveal Rs 1,50,685. On the upside, resistance is positioned around Rs 1,53,620, and a decisive movement beyond this threshold could pave the way toward Rs 1,54,515.
