Gold settled 0.3% lower at Rs 146,079 as rising oil prices revived inflation concerns, while investors awaited next week’s Federal Reserve meeting for insights on the interest rate outlook. Stronger-than-expected US consumer and producer inflation data, propelled by elevated energy prices, underscored worries about enduring inflation. Concurrently, rising tensions in the Middle East and Eastern Europe, along with a surge in tanker attacks in the Strait of Hormuz, amplified the risks of supply disruptions. The Federal Reserve is widely expected to maintain the current interest rates in the upcoming week, while market participants are speculating on a potential increase in December.
Fed Chair Warsh refrained from signalling the policy decision, while indicating that recent inflation developments had not altered his assessment of the US economy. In the week ending October 13, COMEX gold speculative net long positions decreased by 3,741 contracts, bringing the total to 111,079, as reported by CFTC data. This decline suggests a reduction in bullish positioning. In physical markets, Indian gold was observed trading at premiums reaching $7 per ounce for the first time in over three months, as reduced prices stimulated jewellery purchases, in contrast to the discounts of up to $6 noted the previous week.
India’s gold imports experienced a significant decline, dropping to $1.8 billion in September compared to $9.6 billion in the same month the previous year. China’s central bank has continued its gold acquisition for 23 consecutive months, raising its holdings to 77.47 million fine troy ounces from 76.73 million ounces in August, even as the value of its reserves has decreased to $323.52 billion. Swiss gold exports increased by 6% month on month, reaching 165.2 tonnes, marking the highest level since February 2025. This rise was propelled by stronger shipments to Britain, whereas exports to China saw a significant decline of 51%.
Goldman Sachs has upheld its end-2027 gold price forecast at $5,400 per ounce, attributing this to ongoing central bank diversification; however, a more hawkish Federal Reserve may instigate a correction. Gold is currently experiencing a long unwinding phase, as evidenced by a 1.38% decrease in open interest, which now stands at 16,597 contracts, coinciding with a price decline of Rs 440. Support is positioned at Rs 145,560, with an additional level at Rs 145,040. Conversely, resistance is identified at Rs 146,570, beyond which prices may approach Rs 147,050.
