Gold settled down 0.3% at Rs 143,705, influenced by expectations of tighter monetary policy and a stronger currency, as investors evaluated geopolitical developments in the Middle East. The US Federal Reserve maintained interest rates at 3.75%-4.00% in October after a 25-basis-point increase in September, despite the preference of two policymakers for an additional hike. The Fed acknowledged robust domestic spending and vigorous economic activity, although ongoing uncertainty continues to shape the monetary policy perspective.
Analysts have revised their 2026 gold price forecast down to $4,495 per troy ounce from the previous estimate of $4,509. This adjustment is attributed to elevated yields, the strength of the dollar, and expectations of prolonged higher interest rates. However, a recovery is anticipated in 2027. Physical demand exhibited indications of enhancement in India, as festival purchasing during Dussehra elevated premiums to $9 per ounce above domestic prices, in contrast to the previous $7. In China, net gold imports via Hong Kong increased by over 28% month on month to 74.987 tonnes in September, marking a five-month peak, while the central bank continued its gold acquisition for the 23rd consecutive month.
Gold holdings in London vaults rose by 1.96% month on month, reaching 9,821 tonnes at the close of September, with a valuation of $1.3 trillion. Goldman Sachs has upheld its end-2027 gold price forecast at $5,400 per ounce, attributing this to ongoing central bank diversification as a significant structural factor. However, a more hawkish Federal Reserve could instigate a correction toward $4,070 prior to a possible recovery. Geopolitical tensions involving Iran and Israel, in conjunction with policy decisions from the Bank of Japan and the European Central Bank, continue to be significant factors influencing market dynamics.
Technically, the market is experiencing a prolonged unwinding phase, as evidenced by a 0.2% decrease in open interest, which now stands at 15,591 contracts, coinciding with a price decline of Rs 433. Gold exhibits a support level at Rs 143,240, with the potential for prices to decline to Rs 142,770 if this threshold is breached. Conversely, resistance is identified at Rs 144,260, and a breakout above this level could lead to an extension of gains toward Rs 144,810.
