Gold settled 0.34% higher at Rs. 149,610 as investors evaluated the minutes of the US Federal Reserve’s September meeting for insights into the interest rate trajectory. Fed policymakers exhibited a divergence of opinions regarding the necessity for further tightening. Some members advocated for rate increases as a means to address inflation driven by energy costs, whereas others underscored the importance of mitigating potential price pressures stemming from emerging demand. Traders have assigned a 21.6% likelihood to an interest rate hike in October, while the probability for an increase in December stands at 85%.
Geopolitical tensions have maintained upward pressure on gold, as vessel traffic through the Strait of Hormuz has declined to its lowest level in over two months due to a rise in tanker attacks. Delegates at the London Bullion Market Association’s annual conference project that gold will attain a price of $5,013 per ounce within the next year. Perth Mint’s sales of gold coins and minted bars experienced a remarkable increase of 97.6% month on month, reaching 47,300 ounces in September. This figure represents a seven-month peak and reflects a year-on-year growth of 29.3%.
Physical demand across major Asian markets showed a slight uptick as reduced prices enticed buyers. Indian gold discounts have contracted to $14 per ounce, down from a previous $43, whereas Chinese bullion is currently trading at premiums ranging from $5 to $10 per ounce. Gold holdings in London vaults rose by 0.74% month on month, reaching 9,534 tonnes at the conclusion of July 2026, with a valuation of $1.2 trillion. Goldman Sachs upheld its end-2027 gold forecast at $5,400 per ounce, attributing this to ongoing central bank diversification as a significant structural driver.
However, further tightening by the Federal Reserve could lead to a correction toward $4,070, followed by a recovery to $4,200 by the end of 2026. Technically, the market is experiencing short covering, as prices have increased by Rs. 507, while open interest has decreased by 0.75% to 16,575 contracts. Gold is encountering support at Rs. 148,970, with additional support at Rs. 148,335. Resistance is positioned at Rs. 150,090, and a sustained movement above this threshold could lead to further gains toward Rs. 150,575.
