Gold prices concluded the trading session with a 0.92% increase, reaching Rs 1,54,381. This rise was bolstered by declining oil prices, which alleviated inflationary pressures and contributed to a decrease in bond yields. Oil prices fell for the third straight session as Saudi Arabia sought to reinstate operations through its East-West pipeline, while the US 10-year Treasury yield softened to approximately 4.93% after briefly exceeding 5%.
Markets continued to evaluate Federal Reserve policy following its initial rate increase in three years, with investors estimating approximately a 53% likelihood of an additional adjustment in October. Physical demand in India has remained subdued as buyers are holding off in anticipation of lower prices. However, the forthcoming Dussehra and Diwali festivals may provide a boost to seasonal buying. Chinese premiums held steady at approximately $5 per ounce, as the People’s Bank of China continued to augment its gold reserves for the sixth consecutive month in August, thereby extending its purchasing streak to 22 months.
London vault holdings increased by 0.74% month-on-month, reaching 9,534 tonnes at the end of July. This amount is valued at approximately $1.2 trillion, which is equivalent to around 762,723 gold bars. Goldman Sachs has upheld its end-2027 gold forecast at $5,400 per ounce, attributing this to ongoing central bank diversification as a significant structural driver. However, the firm cautions that additional monetary tightening may lead to a correction toward $4,070, followed by a recovery to $4,200 by the end of 2026.
Gold is currently experiencing short covering, as evidenced by a 15.77% decline in open interest to 8,101 contracts, while prices have increased by Rs 1,400. This suggests a trend of position unwinding in conjunction with the price rise. The market is currently encountering support around Rs 1,52,830, and a breach beneath this threshold may lead to a decline toward Rs 1,51,285. On the upside, resistance is positioned around Rs 1,55,260, and a sustained movement above this threshold may propel prices toward Rs 1,56,145.
