Gold settled 0.74% higher at Rs. 143,073, gaining Rs. 1,049 as softer oil prices eased inflation concerns ahead of this week’s Federal Reserve policy meeting. Investors are assessing the Federal Reserve’s interest rate path amid the persistent tensions in the Middle East. Current market expectations suggest a 9% probability of a rate hike on Wednesday, coupled with an 80% chance of an increase in December. Declining energy prices may alleviate inflationary pressures; however, ongoing geopolitical risks bolster gold’s status as a safe haven.
In physical markets, Indian gold premiums rose to $9 per ounce from $7 the prior week, influenced by increased buying activity stemming from reduced prices during the Dussehra festival. Chinese premiums were noted at 9-10 per ounce, even amidst ongoing weakness in jewellery demand. China’s central bank increased gold holdings to 77.47 million fine troy ounces in September, marking the continuation of its buying streak to 23 consecutive months. However, the value of its reserves decreased to $323.52 billion from $350.08 billion due to price fluctuations.
London vault holdings experienced a month-on-month increase of 1.96%, culminating in a total of 9,821 tonnes at the end of September. Swiss gold exports increased by 6% to 165.2 tonnes, reaching the highest level since February 2025. This increase was primarily driven by shipments to Britain, which rose to 126.2 tonnes. Goldman Sachs has maintained its end-2027 gold price forecast at $5,400 per ounce, citing continued central bank diversification as the driving factor. However, a more hawkish Federal Reserve could potentially lead to a near-term correction.
Technically, the market is undergoing short covering, as indicated by a 1.39% reduction in open interest to 15,996 contracts, coupled with a price rise of Rs. 1,049. Gold is presently forming a support level at Rs. 142,320, with a further support identified at Rs. 141,560. Resistance is identified at Rs. 143,600. A sustained move above this resistance could push prices toward Rs. 144,120, whereas a break below Rs. 142,320 may extend the downside toward Rs. 141,560.
