Gold settled 0.77% lower at Rs. 142,596, influenced by ongoing inflation concerns and anticipations of additional US interest rate increases. The Federal Reserve kept interest rates unchanged but maintained the possibility of a December hike, with traders pricing in nearly a 90% probability of an increase. The European Central Bank maintained its rates, with the main refinancing rate at 2.65% and the deposit rate at 2.50%. It cautioned that high energy prices might exacerbate inflationary pressures and hinder economic growth.
Meanwhile, analysts lowered their 2026 gold price forecast to $4,495 per ounce from $4,509, citing elevated Treasury yields, a stronger US dollar and expectations of higher interest rates for longer, although a recovery is anticipated in 2027. Physical demand exhibited signs of recovery in India, as reduced prices during the Dussehra festival stimulated purchasing activity, resulting in domestic premiums rising to $9 per ounce from $7 the previous week.
China’s net gold imports through Hong Kong increased 28% month-on-month to 74.987 tonnes in September, reaching a five-month high, while its central bank extended gold purchases for the 23rd consecutive month. Global central bank purchasing and diversification continue to serve as significant structural supports, with Goldman Sachs upholding its end-2027 gold forecast at $5,400 per ounce. However, the investment bank cautioned that a more hawkish Fed could trigger a correction toward $4,070 before prices potentially recover to $4,200 by the end of 2026.
Gold holdings in London vaults increased by 1.96% month-on-month, reaching 9,821 tonnes at the close of September, with a valuation of around $1.3 trillion. Technically, the market is experiencing renewed selling pressure, evidenced by a 0.08% increase in open interest to 15,603 contracts, alongside a price decline of Rs. 1,109. Gold is currently finding support at Rs. 141,990, followed by Rs. 141,390, while resistance is placed at Rs. 143,560. A sustained move above this level could open the way towards Rs. 144,520.
