As investors anticipated the next PPI and CPI figures for more clarity on the Federal Reserve’s policy path, gold closed slightly higher by 0.03% at Rs 152,818. Stronger US job data strengthened hopes that interest rates could remain rising. US job growth accelerated sharply in August, while the unemployment rate remained steady at 4.1%, maintaining the potential for a rate increase this month. Meanwhile, US President Donald Trump reiterated his pressure on the Federal Reserve to reduce interest rates and cautioned against trade restrictions targeting countries that maintain deficits with the United States.
Safe-haven demand continued to be bolstered by tensions in the Middle East, as Iran issued a warning of a severe response to any additional attacks in light of the effects of US sanctions. Central-bank purchasing persisted in offering a foundational support, as the People’s Bank of China prolonged its gold-acquisition streak to 22 uninterrupted months, augmenting its holdings to 76.73 million fine troy ounces from 76.08 million at the end of July. China’s gold reserves were valued at $350.08 billion at the end of August, an increase from $306.35 billion a month prior.
Physical demand in India has shown signs of improvement as reduced prices have stimulated purchasing activity, resulting in a decrease in domestic discounts to $54 an ounce from a previous $135. However, the persistent high import duties of 15% along with an additional 3% sales levy continue to limit overall demand. Chinese bullion traded at premiums of $3.5-$9 an ounce, reflecting a stronger investment interest even in the face of declining jewellery consumption. London vault holdings increased by 0.74% month-on-month, reaching 9,534 tonnes at the end of July. This amount is valued at $1.2 trillion and is equivalent to approximately 762,723 bars.
Technically, the market continues to experience short covering, as open interest has decreased by 1.63% to 10,592, while prices have increased by Rs 51, suggesting the presence of fresh buying support. Gold is maintaining its position above Rs 152,015, and a continued movement above this threshold reinforces a positive structure, paving the way toward Rs 153,460. A decisive breakout above Rs 153,460 could extend gains toward Rs 154,100, while a break below Rs 152,015 may trigger further weakness toward Rs 151,210.
